Breakfast briefing: China beefs up frozen meat inspections

US households under increased pressure; Canada housing markets boom; China blocks frozen meat imports; iron ore price up; UST 10yr yield at 0.68%; oil and gold up; NZ$1 = 65.4 USc; TWI-5 = 68.4

18th Aug 20, 7:17am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news of reports China is blocking frozen meat imports in the southern gateway city of Guangzhou.

But first in the US, pressure on households continues to build. The delinquency rate for residential mortgages rose to 8.2% in the June quarter, up nearly double from the first quarter and the largest quarterly increase on record. Loans backed by the FHA, a program used by many first-time buyers and those with lower incomes, saw their delinquency rate jump to almost 16% - the highest in more than 40 years.

The latest regional Fed survey, this one for the North East region, manufacturing activity grew only slightly in August but the general business conditions index fell fourteen points to 3.7. The new orders index fell even harder to be negative.

In Canada, their housing market was on fire in July. Volumes and prices surged to record highs as both buyers and sellers made up for earlier lost time. Volumes were up +26% with Toronto, Montreal and Vancouver soaring.

In China, they are intensifying their scrutiny of frozen food imports as a coronavirus risk. And the southern city of Guangzhou has banned frozen meat imports.

And there are broadening concerns about China's grain supply. Weather and market pressures have seen growing concerns about whether China will have enough this year. Even Chairman XI is out telling people not to worry. But the fears are growing

Separately, the iron ore price hit a six year high yesterday in China and that is a +50% rise since the start of 2020.

Overnight, European equity markets rose a modest +0.2%. Today, Wall Street is marginally better, up about +0.3% in early afternoon trade and close to a new record high. Yesterday, Shanghai rose aggressively, up +2.3%. Hong Kong was up +0.7%, but Tokyo fell away ending down -0.8%. The ASX200 was also down -0.8% and the NZX50 Capital Index had a much better day, up +1.9% at the close.

The latest global compilation of COVID-19 data is here. The global tally is 21,749,000 and that is up +221,000 since when we last checked this time yesterday. Global deaths reported now exceed 776,000 (+4,000).

A quarter of all reported cases globally are in the US, which is up +37,000 since yesterday to 5,580,000 and a lower daily increase that we have had for a while. But this may be due to a sharp pullback in testing. US deaths are now just over 173,000 and a death rate of 523/mln (+1/mln). And the net number of people actively infected in the US rose overnight to 2,478,200, so more new infections than recoveries.

In Australia, there have now been 23,559 COVID-19 cases reported, another 271 since yesterday, and still very much concentrated in Victoria. But there were cases recorded in other states too. Australia's death count is up to 421 (+25). Their recovery rate is now back up to over 61%. There are still 8605 active cases in Australia (-207) indicating a turning tide and more recoveries than new infections.

The UST 10yr yield has steadily declined today, down -3 bps at 0.68%. Their 2-10 curve is +6 bps flatter at +53 bps. And their 1-5 curve is little-changed at +15 bps, while their 3m-10yr curve is also flatter at +59 bps. The Aussie Govt 10yr yield is also down -5 bps at 0.88%. The China Govt 10yr is still at 2.96%. And the NZ Govt 10 yr yield will start today at 0.69% and +2 bps firmer.

The price of gold is up +US$37 today at US$1,982/oz. That is a +1.2% gain overnight. Silver is up +3.5%.

Oil prices are firmish today. They are now just over US$42.50/bbl in the US and the international price is now just under US$45.50/bbl.

And the Kiwi dollar held overnight at 65.4 USc and has held from there. But against the Australian dollar we are almost -½c weaker at 90.8 AUc. Against the euro we are down marginally at 55.1 euro cents. That means our TWI-5 has dipped to 68.4.

The bitcoin price is up strongly again today, up another +4.6% from this time yesterday to US$12,402. 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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135 Comments

by muzled | 18th Aug 20, 7:31am 1597692711

Kotare, off topic but back to yesterdays conversation about Collins and integrity.

Check this video of her being asked if she'd accept the election result at 2.25 in.

Tova Obrien asked her 8 times and even then she couldn't give a clear answer.

https://www.newshub.co.nz/home/politics/2020/08/watch-national-leader-j…

The lady is a political ghoul.

by stuart786786 | 18th Aug 20, 8:02am 1597694577

Sign of a loser.

Trump doing the same.

by nymad | 18th Aug 20, 8:09am 1597694989

"I look forward to being the Prime Minister."
So, happy to accept it in the unlikely event that she is to get a majority.
The highest levels of integrity.

by Kezza R | 18th Aug 20, 8:15am 1597695315

Three years ago.... JA.

Perhaps it is time for JC to promise NZ the world thinking she will not get in...

by nymad | 18th Aug 20, 8:21am 1597695669

Take a bet on it Kezza.
You seem certain that JA won't keep her seat - there are some Aussie bookies who will give you 7/1 to take that bet.

by Kezza R | 18th Aug 20, 8:29am 1597696176

Your memory is short.
Three years ago JA didnt have a chance. All she had were over inflated promises and a smile.
JC has little to no chance but what she isn't doing is promising NZ the world with no hope of delivery if she dose get in.

by northman46 | 18th Aug 20, 8:30am 1597696245

Is that why all she offers is more roads?

by nymad | 18th Aug 20, 8:38am 1597696680

Ahh. The good old 'vote for us, we'll build you a new road' deal.
Certainly no hope of under delivery with that one.

by Kezza R | 18th Aug 20, 8:43am 1597696993

Even JA could builds road... it would blow out in time and money but she would get it done.... maybe 4 years into the Govts term but it will get done.

by nymad | 18th Aug 20, 8:48am 1597697312

National were pretty good at not building roads, too.

by Kezza R | 18th Aug 20, 8:57am 1597697837

Try and stick with the here and now.
Yes Labour will most likely win but with their outstanding lack of ability to get anything done we are in deep trouble.

by nymad | 18th Aug 20, 8:59am 1597697948

Yea, but National had a pretty abysmal record of 'getting things done', too.
So, I really fail to see what the argument is here.

by RickStrauss | 18th Aug 20, 9:28am 1597699701

Yeah, odd. "Stick with the here and now" seems to boil down to "measure the current government by its record on delivery, but don't measure the previous government their main opposition by its record on delivery".

by Kezza R | 18th Aug 20, 9:57am 1597701432

What I am saying is that they are both bad. In fact they are all bloody useless but the narrative goes arround and arround over who is the least useless instead of holding to account and demanding action not excuses.

by RickStrauss | 18th Aug 20, 10:14am 1597702450

Agree we need to push them far harder.

I would also like to see more civics education in schools (might also need an element of education on how to critically evaluate propaganda too). It's pleasing at least that the government did put money into civics education, so you might hope that this over time helps create a more politically active and engaged population.

by frazz | 18th Aug 20, 10:42am 1597704178

Ok Kezza we have heard you make the same comment for the last 3-4 months. Can you please switch to Spring mode were you tell us your solutions for the country and what you would like to see from the Government. Lets try and solve some issues rather than rinse and repeat?
July Business recorded a expansion surely you can give some credit to the government here?

by Kezza R | 18th Aug 20, 11:51am 1597708300

I have outlined that I view the current system as crap and I would like a unified approach.
I'll park my 'for the greater good' view and deal with the current crap system and work it to my own personal advantage like our politians do. You may have created a monster but let's face it the system won't change so its gloves off and look after number one from now on. Over and out.

by Richardfromauckland | 18th Aug 20, 10:10am 1597702225

There's growing competence from the government. Hipkins, Woods showing their worth, GR and JA leading from the front and then some decent performers including the ever solid David Parker, Andrew Little, Ph... Ok in getting carried away. But in general there are enough signs that with a bit more freedom (ie. Not encumbered by NZF) that a second term Labour Govt could make a real positive impact.

by Rhumline | 18th Aug 20, 10:22am 1597702933

Agree with this comment. They appear to have grown with experience. national have gone back to tired old faces and tired old policies.

by Kezza R | 18th Aug 20, 10:36am 1597703791

Let's look at the fact that the testing of frontline staff was crap. That is not stepping up, it is failing!
Labour is crap, National is crap but we clutch at straws in hope that they will somehow turn their failure into delivery.

by Nzdan | 18th Aug 20, 11:44am 1597707843

Who tests the frontline staff? The government doesn't. Sure, if you want to take this whole "The buck stops with the Government" position that's your perogative, but if the Government has (i dont have evidence to say they have) done all they can to communicate the rules/guidelines around testing and these aren't followed what more can they do?

Strap people who won't commit to testing to gurneys and force the samples out of them? Fire them despite the lack of provisions in their employment contracts for testing? We already have shrieks of "communism" over the lock down.

by Pietro | 18th Aug 20, 10:42am 1597704173

I have to agree. Baptism of fire for Labour, but looking solid now. Have a lot of time for Hipkins and Wood.

by Kezza R | 18th Aug 20, 4:31pm 1597725085

Yeah mate they are on fire. Instead of $500k for the Beehive slide they maybe be able to cut a couple of hundred off that now.
http://wellington.scoop.co.nz/?p=123911

by PocketAces | 18th Aug 20, 10:49am 1597704563

Might be a bit easier without a NZF millstone around their necks

by Philby | 18th Aug 20, 8:58am 1597697894

Which goes to show you cant trust any of them.

by nymad | 18th Aug 20, 9:00am 1597698002

Exactly.

by Foxglove. | 18th Aug 20, 9:05am 1597698352

Here’s a good question. Without even thinking about PM’s, how many MP’s from all parties, would you like to employ, be employed by or employed with. Say this century, I personally, could count them on one hand.

by Kezza R | 18th Aug 20, 9:54am 1597701253

Exactally but we get to choose between two teams that do not have a plan and won't be able to carry it out if they did.

by Belle | 18th Aug 20, 12:22pm 1597710144

I would employ Steven Joyce. Though he may be wasted on the farm.... But I reckon in no time the farm would be sold and a more profitable business bought. Steven oh Steven giza call eh

by Lanthanide | 18th Aug 20, 9:01am 1597698063

Pretty good at promoting roads with cost benefits ratios of less than 1, and promising roads without any plans to fund them.

Also announcing the same road multiple times - I believe Muller's announcement of 4 laning Ashburton to Christchurch was the 3rd time National had announced it.

by Roger the dodger | 18th Aug 20, 9:13am 1597698826

Heard of the sky path? Labour up to 3 on that one.
And while we are debating integrity: The latest version extended the project (360m) and was done to obfuscate the fact they horribly undercosted the initial project (65m).

Anyone on here debating integrity of one political party over another is naive. All polititicians cultivate the appearance of integrity people. Smarten up.

by mikekirk29 | 18th Aug 20, 9:15am 1597698947

Difference being that Collins has no allies except the robotic Mr Seymour and she is not type to be compromising or diplomatic to get allies.
She will lose by 20% plus

by Pietro | 18th Aug 20, 10:45am 1597704330

Yep, Collins is certainly crushing it, National’s share of the vote, that is. Would have been better to get Bridges elocution lessons.

by JKB | 18th Aug 20, 8:25am 1597695955

Why don’t the “reporters” the Red Donkey the same question ? I think JA ignoring the nonsense and sticking to the issues. We have a government that have failed at everything, have not delivered on on election promise and can’t manage the border. There must be some debate around the plan for 2021 and competency to execute the plan. Slogans without substance don’t cut it.

by rastus1 | 18th Aug 20, 8:29am 1597696148

perhaps true...but tell us about the 9 years where the policy was immigration and house flipping.

by Kezza R | 18th Aug 20, 8:32am 1597696356

But what about the Helen Clark years ..... that old arguement can keep going back till the start of time.
We are up against something much bigger, a leader that can not deliver is a liability.

by Plutocracy | 18th Aug 20, 8:43am 1597697031

I hope I'm not putting you on the spot but who do you think is fit to lead Kezza?

by Ptolemy | 18th Aug 20, 9:12am 1597698725

Bwahaha. Oh don't. I suspect the answer is ABJ (based on blind ideology). There really isn't an alternative though. The other mob are worse than a rabble. I saw a poll on CNN this morning that said that 56% of Biden supporters under the age of 35 who were asked why they were going to vote for him said "Because he isn't Trump". The next highest answer at 19% was "Integrity". I don't think we are anywhere near that level of dissatisfaction yet in NZ. Most people I speak with think Jacinda and crew have done an OK job (and I am a white collar worker).

by Kezza R | 18th Aug 20, 9:30am 1597699832

We have the biggest issues that NZ and the globe has ever faced looming.
What I would like to see is National and Labour realise that neither one of them has the answer or the ability to confront them alone and decide this is about NZ and much bigger than their ego's.
What they could do is combine for one term and work together to confront what is coming instead of working against each other.
At present we have slightly more than half MP's working on helping NZ and the others not doing much. Get them ALL working and earning their money for NZ.

In short, we have no clear cut Party that has the answers, a plan and can deliver. Meanwhile the population of NZ bickers away and not demanding action and accepting failure.
What ever is going on, it is not working. JA & JC needed to pull their big girl panties up, park their egos at the door and work together, or well and up like the US.

by RickStrauss | 18th Aug 20, 10:15am 1597702554

This is part way to an argument for adopting the Electoral Commission's recommendations of a 3% threshold and STV. Force parties into not being able to rule by a simple majority but instead by discussion and compromise.

by PocketAces | 18th Aug 20, 10:53am 1597704821

I thought it was 4%, plus ridding us of the whole disingenuous coat tailing rule and one or two other things I can't quickly recall, but you know what happened to those when it came time to discuss and legislate, don't you?

by Lanthanide | 18th Aug 20, 12:35pm 1597710902

Yes, the main proposals were dropping the threshold to 4% and getting rid of coat-tailing.

IMO a 3.5% threshold and coating on a 1-for-1 basis would be fine, eg if you won 1 electorate seat you could bring in 1 other list member, or 2 electorate seats could bring in another 2 list members, if your party vote was large enough.

by Kezza R | 18th Aug 20, 11:53am 1597708437

Kind of get what you are saying but then I look at the next down the line bunch of crazy that are even more useless. Imagin the crazies that would come out of the woodwork.....

by RickStrauss | 18th Aug 20, 12:56pm 1597712198

But we cannot be for cooperation and against cooperation at the same time. The weight of numbers required to pass laws keeps the nuttiest flavours from dominating policy. Once upon a time both major parties agreed to disband the upper house. It's imaginable that they could cooperate on laws again were it the nature of the beast. Hey, they voted cross party on recent policies.

by Lanthanide | 18th Aug 20, 9:03am 1597698208

The Helen Clark years that ran a surplus every year and got us down to net 0 government debt, allowing National to borrow up large for the GFC and Christchurch earthquakes?

by bender | 18th Aug 20, 10:15am 1597702519

It was Cullen who managed it, and what was his reward? Scoffing from that great money manager and GST liar, J Key.

by Nzdan | 18th Aug 20, 12:03pm 1597709015

The Reserve Bank currently estimates the total construction cost of the rebuild to be about $40 billion (in 2015 dollars), comprising $16b Residential, $16b Commerical and $7b infrastructure.
As at 30 September 2015, insurers had paid out $26 billion.

Government debt increased from $10b to $60b from 2008 to 2015, yet insurers have picked up $26b out of the $40b estimated rebuild cost. Where did that $50 billion go? The GFC????
https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulleti…

by Lanthanide | 18th Aug 20, 12:36pm 1597711008

Tax cuts paid for by borrowing, obviously. The treasury 'projections' showed it being revenue neutral, because they magic up some 'greater economic efficiencies' that show the economy growing faster.

But that's all just projections, not reality.

by The Person | 18th Aug 20, 4:31pm 1597725119

allowing National to borrow up large for their tax cuts

by Albert2020 | 18th Aug 20, 10:15am 1597702527

A leader that is not truthful is far more dangerous...Can anyone with any integrity actually trust the National party after the past couple of months? I'm no fan of David Seymour (or WP) but it's little wonder National are leaking votes to him

by GV 27 | 18th Aug 20, 9:18am 1597699123

How truthful do you think the Government is being over the Covid19 response? Seems we only find out the things we're told don't line up with reality when someone asks tough questions they can't just 'reject the premise of'.

by murray86 | 18th Aug 20, 9:26am 1597699563

Jumping in here because Kezz will take this the right way; no party is prepared for the current situation. However Labour got in is currently irrelevant to the current situation. The problem we face is how do we keep an economy going when almost the entire basis of it has been kicked out from under us? Labours problem is that they have to figure this out while driving. Nationals advantage is they can do it in the backroom, while up front they are critiquing the Governments efforts that are done on the fly. And there are always the armchair critics who know better! With traces of COVID appearing on imported goods, and no science that conclusively states whether or not it can be caught from those traces, despite opinions, expert and otherwise, even trade becomes at risk when there is a need to keep the virus out of the country.

So the question facing our current and next prospective Governments, is how do we support the people of this country at a reasonable standard of living until such time as the new normal is understood? This problem is complex because it needs to deal with the flawed policies from the past and transition into an uncertain future while ensuring all the population is carried forward. The reset is happening whether we like it or not. And it is clear that many of the so called 'experts', especially the economic ones are out of their depth and struggling to understand all the impacts.

by Kezza R | 18th Aug 20, 9:48am 1597700939

Cheers Mazza.
Time for our politians to park their egos at the door and work together and confront what is coming instead of playing their little school yard games.
What we seam to forget is that they all work for us and we should be utilising all of them instead of slightly more than half.
Put Minister's in that can deliver, supported by the others running the small stuff. Red, Green, Blue, Black, penis, no penis, turban, burka or whatever, put the best person in that can get the job done.
'This politian is a liar, that one is not' Seriously NZ WTF? They are politians, they are all liers but somehow we forget that.

by murray86 | 18th Aug 20, 9:48am 1597700911

One of the things that surprises me is the lack of discussion around Far UVC lights. These have been proven to 'inactivate' airbourne virus and bacteria (a report HERE). i don't know if it is equally effective on bacteria and virus' on surfaces, but would think it is reasonable to assume so. With like quite an up front cost, the downstream savings could be massive.

by Kezza R | 18th Aug 20, 10:00am 1597701626

They work in spa pools.

by bender | 18th Aug 20, 10:35am 1597703751

You'd think the DHB's would be doing this in the hospitals. I can't even get the local marina to put them in the public toilets (don't even answer emails suggesting it).

by PocketAces | 18th Aug 20, 10:56am 1597705001

If you are talking about the things I recall using in motel rooms etc, they require a dark, closed space and a few hours to work, their application would be a bit limited in that case

by murray86 | 18th Aug 20, 11:07am 1597705622

The article indicates it is about the size of the dose. Their test apparatus exposed the sample for about 20 seconds. So ultimately it is a trade off between the brightness of the lamp v time. Brighter > less time.

by mikekirk29 | 18th Aug 20, 9:17am 1597699072

"not delivered on an election promise"
Really? So, government has not invested anything in new or improved schools or hospitals ?
And child poverty not been reduced
And beneficiaries not been given more?
And minimum wage not been raised.
V fair account by you. Kiwibuild is real failure.

by GV 27 | 18th Aug 20, 9:21am 1597699299

Child poverty has moved within the margin of errors for most indicators. In some it has gone backwards.
National also increased benefits, lifted the minimum wage. So what?

Kiwibuild failed. Light rail failed. The ridiculously partisan CGT working group was doomed to fail. The FBB was passed, but we did not renegotiate FTAs like Labour said they would, so Aus and Hong Kong were exempted - like people said they would have to be. So...fail. It would be shorter to list what they actually achieved.

by Lanthanide | 18th Aug 20, 12:38pm 1597711123

So...fail. It would be shorter to list what they actually achieved.

Go watch Jacinda's 2 minute list of accomplishments then, I guess. Certainly would take less time to read aloud the things you just said.

by GV 27 | 18th Aug 20, 1:06pm 1597712808

The things I just said were their flagship election policies - their big sexy bait-and-switch vote-winners. I take it you're just as forgiving for National for making a bunch of stupid pointless changes around tinkering around the edges while the housing crisis exploded - despite them promising to fix it when they were campaigning? Of course you're not.

by Pietro | 18th Aug 20, 10:47am 1597704460

by Pietro | 18th Aug 20, 10:49am 1597704598

Oddly, she looks a bit like Trump at certain angles.

by MortgageBelt | 18th Aug 20, 7:42am 1597693322

Aussies use their Super COVID hardship funds for a first home deposit
https://www.domain.com.au/news/first-home-buyers-withdrawing-superannua…
.
Kiwis now living in NZ who have an Aus Super account likely to be doing the same thing.
(For those who disbelieved my comment on this weeks ago)

by blobbles | 18th Aug 20, 7:49am 1597693750

5% deposit required for marginal buyers and probably marginal properties. Yeah, that's not going to see people go into negative equity in a downturn.

Although Aussie are now counting non-performing loans as performing, so everything is fine. More printed money will be incoming to paper over the cracks.

by MortgageBelt | 18th Aug 20, 8:01am 1597694486

It does show the desire to buy a first home by many - and that getting some kind of deposit together is the biggest challenge for FHBs. If people wait for ideal conditions then they may delay forever.

by GV 27 | 18th Aug 20, 10:18am 1597702735

Yep - we never got the big correction after 2008 that we should have - should FHBs have waited over a decade on the sidelines?

by blobbles | 18th Aug 20, 7:42am 1597693340

Mortgage delinquency rates getting huge in the US, bank bailouts or bailins must be on the radar next for the fed.

by diogenesthecynic | 18th Aug 20, 7:54am 1597694041

Moral hazard? What moral hazard?

by blobbles | 18th Aug 20, 10:16am 1597702603

Their actions over the past 6 months show that moral hazard has been thrown to the wind. Some of their leaders have had it outlined to them in interviews, their answers were basically "no, we don't see that as moral hazard", when it was pretty obvious it was.

by King of the whiners | 18th Aug 20, 7:55am 1597694145

Excellent paper in top journal examining the Swedish Covid experience, particularly in relation to their Scandinavian peers:
https://journals.sagepub.com/doi/full/10.1177/0141076820945282

Take home points:
1) Sweden suffered much worse outcomes in terms of disease (Figure 1b)
2) Contrary to what is often claimed Sweden was not just 'open for business' - in fact by June both Norway and Finland had less stringent lock down restrictions in place (Figure 1a)
3) There is no evidence that the rate of seroconversion (used as a proxy for immunity and hence herd immunity) is significantly 'better' in Sweden than in several other nations (Table 2).
4) It's estimated in this paper that herd immunity for covid would only be achieved anyway when 70% of the population had become immune (not at the much lower figures often bandied about)
5) Not in this paper but added: GDP rates for Q2 for Scandinavian nations a) Sweden -8.6%, b) Denmark -7.1%, c) Finland -3.2% d) Norway -8.5% (est). So not much difference there.

by diogenesthecynic | 18th Aug 20, 8:03am 1597694601

Virus minimizers aren't interested in hard data though. They just want their narrative supportive with any scrap of news.
Remember when this crowd went on and on about annual flu deaths? In 2017 WHO revised up flu related deaths (including people whose flu infections had exacerbated other health issues i.e. diabetes, heart) to 650k. Covid19 has already killed way over double that in less than a year. We haven't even got through one northern hemisphere winter with the pandemic yet. But this crowd would use the upper limit of the flu "related" deaths but exclude all the Covid19 "related" deaths and pretend that Covid doesn't have massively debilitating long term effects or damage the body and escalate fatality from other causes. They cherry pick data because it's emotional for them. Only news that confirms their belief is valued.

https://www.who.int/news-room/detail/14-12-2017-up-to-650-000-people-di…

by MortgageBelt | 18th Aug 20, 8:19am 1597695540

There are also the Bot farms and orchestrated SM campaigns to maximise news damage about certain countries and deflect any criticism of the CPC.

by Foxglove. | 18th Aug 20, 8:23am 1597695839

Curled up in that too is how well geared Sweden is/was with hospital capacity/ICU and already a proven tracing system available. What was overlooked here quite wilfully by some, is the fate of existing patients, cardiac, oncology, accidents if the hospitals have an overwhelming influx of CV19’s. Also my experiences of being in Scandinavia, the culture is settled and usually compliant, people just have to be sensible & cooperative to get through the hard dark winters all together.

by gingerninja | 18th Aug 20, 8:54am 1597697655

Even years down the line, it will be difficult to compare apples with apples in term of pandemic response. There are too many variables. Population density, age, underlying health, obesity levels, trust in authority figures, intimacy and touching culture, compliance to health policy, hospital beds, staffing levels, health promotion, treatment and R&D spending. Even the quality of incubator! Different countries are fiddling with their numbers up and down. I rarely see any of this discussed rationally and yet it will impact the pandemic. As I keep saying on repeat, it's much too soon to make any conclusive claims about the pandemic or the virus. We need to be patient and wait for more data and for science to do what science does.
The rolling 7 day average infections are slowly growing again in much of Europe. Slowly building is managable. But if in a few months the weather turns colder and everyone starts spending more time inside again and this coincides with flu season in the northern hemisphere, the numbers could take a very nasty turn. NZ managed to avoid this seasonal issue. Even if we can't eradicate the virus again, we will have more or less managed to reduce the risk of a winter disaster for this year. It's not to be sniffed at (pardon the pun).

by King of the whiners | 18th Aug 20, 9:18am 1597699086

This is a very important point (largely over-looked in NZ) - as we shall shortly see as the virus takes off again in the Northern Hemisphere winter. Here in NZ we might be fortunate to enter next winter with one or more at least partially effective vaccines in our arsenal.

by 1986 | 18th Aug 20, 11:56am 1597708619

If we can manage this new outbreak (which is looking increasingly likely), go another month or two without community transmission and from now on be thorough with our testing after learning our lesson we should be able to make it through to summer and enjoy it mask free. Let's hope 2021 brings some better news...

by fat pat | 18th Aug 20, 9:34am 1597700076

@King of the whiners, some counterpoints to your points
1) Total deaths's in Sweden in 2020 may not be hugely different from 2019. What may have happened is the bringing forward of deaths of very frail, many of whom would have .died later this year anyway
3 & 4) There's quite a lot of evidence now that IgG antibodies don't hang around for very long, and the T-cell response may be a better indicator of covid exposure. Just taking a step back and simply looking at the daily deaths it becomes pretty obvious that Sweden, New York, and a bunch of other place around the world have already more-or-less achieved herd immunity.
5) If you're insinuating that lockdowns have zero economic impact, then that is so nonsensical I don't know where to begin.

by King of the whiners | 18th Aug 20, 10:32am 1597703552

I am not insinuating anything of the sort - don't put words in my mouth. I repeat - here is the data - GDP rates for Q2 for Scandinavian nations a) Sweden -8.6%, b) Denmark -7.1%, c) Finland -3.2% d) Norway -8.5% (est).

If that GDP data doesn't fit your narrative, then tough. It's data - deal with it.

by fat pat | 18th Aug 20, 10:51am 1597704696

GDP is a pretty meaningless number to use like that. It's got too much baked into it. Better to look at GDP's components like consumption, and the balance of payments, govt spending & taxation.

by Cowpat | 18th Aug 20, 11:01am 1597705294

RBNZ most recent forecast NZ GDP Q2 -14.3 percent in the baseline scenario "Overall, annual GDP is assumed to drop by 5.8 percent in 2020" assuming no further lockdowns
https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetar…
Massey GDP tracker forecast GDP to fall 15.8 percent Q2 .http://gdplive.net/Dashboard.
Finland was in a recession end Q1 , Denmark GDP had fallen 2 percent Q1 , its data , it has to been seen in context.

by HeavyG | 18th Aug 20, 10:44am 1597704284

Sweden and New York deaths are dropping as they are in a self imposed lock down. This dream that they have reached herd immunity is BS. You imagine they are all walking around licking each others faces and laughing how they're all immune. Truth is they're locked up in their houses and slowly bleeding deaths each day as Covid bubbles under the surface. A big soccer stadium full of Swedes in the middle of winter would do the trick, back to a 100 a day dying.

by JimboJones | 18th Aug 20, 10:51am 1597704709

If the Swedes really thought they were close to herd they may as well remove all restrictions and live a normal life (I don't think their health care system is overwhelmed at present). The fact they haven't done that implies they aren't anywhere near herd.

by JimboJones | 18th Aug 20, 10:48am 1597704507

5) Of course lockdowns have an economic impact, but so does social distancing and people's fear of the virus. For example we had 7 weeks of very expensive lockdown followed by no social distancing or fear for 100 days. Sweden has had ~6 months of social distancing and fear (e.g. elderly are probably not going out much). So far it looks like those two options have a similar GDP cost (although our option would have a much higher government debt cost).

by dafarmer | 18th Aug 20, 7:54am 1597694055

I generally enjoy this site because it is about economy and business and has interesting comments and lines like from AndrewJ is it., Can we please leave the political rhetoric for other less credible sites like the one above on JC. Equally could be said about JA weak answers on the border with Hosk this morning, and then we'll get a stream of diatribe here for the rest of the day.
How about comments on how create jobs in our regions, towns and cities.

by Andrewj | 18th Aug 20, 8:23am 1597695788

andrewj is in Queenstown with all the family, living the high life. Going to wind my way home slowly.

by Andrewj | 18th Aug 20, 8:34am 1597696465

I think the China food shortage could be a big deal, mates in usa have empty silos, first time they ever dumped grain straight to railway wagons, all silos empty.
China has huge grain stored but very poor quality,
https://video.parler.com/7K/47/7K47ECtUW9Uu.mp4

by youngdumbandbroke | 18th Aug 20, 8:53am 1597697639

I read an article a while back that the Ukranian grain China had stored was starting to go off/rot?

by Andrewj | 18th Aug 20, 10:39am 1597703997

http://dimsums.blogspot.com/2020/?m=0

by youngdumbandbroke | 18th Aug 20, 11:26am 1597706802

Depleted by September. Yikes

by Foxglove. | 18th Aug 20, 8:55am 1597697728

China looks well and truly in the jaws of a dilemma. Being short of food and under siege with rainfall and flooding, is not opportune for bellicose sabre rattling. As commentators here have explained the world is not viewing them as favourably as it once did, for obvious reasons. Reminds me a bit of Allo Allo, of Herr Flick’s comment to Von Smallhausen, “lately it has come to Berlin’s attention, that the Gestapo have become unpopular.”

by Noncents | 18th Aug 20, 10:28am 1597703338

Yes, the Chinese govt mandated reduction in Food waste, would appear to signify some big issues behind the scenes. Another famine on the cards?

by Foxglove. | 18th Aug 20, 11:19am 1597706384

Aye, and the vassal state Nth Korea, if nothing else, is looking like a harbinger of the crisis.

by 1986 | 18th Aug 20, 11:58am 1597708722

I would think it is because they are going to try and go as self sufficient as possible so they have more negotiating power.

by Kate | 18th Aug 20, 8:48am 1597697335

Have a great break!

by waymad | 18th Aug 20, 11:37am 1597707453

Go for a Bungy Jump - after all, we all Paid for it (or more to the point, our children and grandchildren are about to) ....

by Andrewj | 18th Aug 20, 12:14pm 1597709699

One of my daughters got bumped of her airnz flight out of Npr because she was a minute late for check in , so just the four daughters couple of boyfriends and two grandkids. One of the girls ski pants look a bit tight, if they go it will be like a ballon popping.

by Foxglove. | 18th Aug 20, 1:09pm 1597712959

Thanks for the warning.

by RCD | 18th Aug 20, 8:30am 1597696223

yes J.A. was dodging the Covid test questions and at least 3 times clearly blamed the border workers for being reticent and not coming forward for tests which according to her were freely available to all, that has been shown to be nonsense already, clearly there was no testing because none was provided.

by theglc | 18th Aug 20, 8:44am 1597697072

To effectively monitor any potential for the virus to escape through border workers we would need to be testing them on an ongoing basis every 3 days/shifts.

Really, if you keep the borders open you are inviting outbreaks. Doesnt matter what party is in power, this will be ongoing until a vaccine is found.

by GV 27 | 18th Aug 20, 8:50am 1597697403

This whole Government response has been an after-the-fact sleight of hand, masked with phrases like 'hard and early' which require heavy doses of revisionism and ignore the cynical responses to opposition proposals and suggestions, until they're suddenly adopted and earnestly explained as the 'moral' thing to do.

by Believer1980 | 18th Aug 20, 9:12am 1597698754

She used the same tactic (blame foot soldiers for general's actions) at the early stages of the crisis when she was questioned about people not being tested (she blamed the front line doctors saying they refuse to test when everyone in NZ knew that the MoH had issued a very specific criteria for who the GPs can refer for testing).
When you are popular, you can get away with anything. She asks everyone to be united (and gets massive praise for asking others to be united), yet when it comes to be accountable for actions, it is always others who did not perform.

by DD62 | 18th Aug 20, 10:35am 1597703753

Lets be honest here - Peters put in place a PM who has never had a real job, has zero commercial acumen or training and has spent the majority of her adult life as a VERY average Labour back bencher. She is the Emperors new clothes! Her and her circle of equally shallow MP's are going to go down in history as one of, if not the worst government in NZ history!

by Kezza R | 18th Aug 20, 10:48am 1597704527

Jacinda did a good'ish job at CV control, we have to give her that.
What she can not do is inspire others that do not have the ability to manage.
National's history shows they are not the best either.
As a population we are being offered two main choices that are frankly bloody useless and we swallow the PR hope that the old dog will learn new tricks.

by RickStrauss | 18th Aug 20, 12:59pm 1597712360

The other candidate (Bill English) was also a career politician. Meanwhile, that last sentence, they would have to compete with can kickers who preceded them and failed to deal with the major issues they campaigned on.

by Albert2020 | 18th Aug 20, 10:17am 1597702655

To say there was no testing is incorrect, to say that all were tested is also incorrect.

by sharetrader | 18th Aug 20, 10:51am 1597704664

a lot have now come forward to national Mp's to let them know what was happening
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12357416
National leader Judith Collins has slammed the testing of border workers as a "complete failure" and says the public has been misled.
Collins said she had heard from border workers who weren't offered tests. Some workers who asked for tests were even refused them, she said.
if you were not symptomatic you were told you didnt need one, even if you wanted one for peace of mind and to make sure you family was kept safe from your work

by dollar_bill | 18th Aug 20, 9:05am 1597698358

lets not talk politics? - unfortunately the statist society we have procured for ourselves over the decades is inextricably entwined with the economy and business.
how to create jobs - start a business and employ someone? provide a service and sell it to someone? or is this a political question? expand the state?build roads? plant trees? pump water? put up windmills?

by Kauri | 18th Aug 20, 9:28am 1597699681

Fair comment. I enjoy this site too because of generally informed and intelligent debate.
Although regarding your question about "how [to] create jobs in our regions, towns and cities" - that is where I believe the Govt (and opposition and commentators) need to focus on macro policy. Too long NZ has focused on micro-managing parts of the economy and has not been willing to let the market work and for good, productive businesses to thrive and poor businesses to fail etc. I could give many examples but here are two that may provoke debate.
1. You want jobs in towns and regions? Look at all the horticulture (vineyards, kiwifruit, apples etc) that has gone in, in recent years. Heaps of jobs there - but many low-paying, low-skilled, seasonal jobs - not the jobs we want or need to make NZ wealthy and hence many business owners (horticulturalists in this case) plant up expecting they can lobby the govt to micro-manage their self-inflicted labour woes by providing them with cheap plentiful labour via RSE, working holidayers, work visas etc.
2. Another is the PGF (and don't just blame NZF for this because subsidising zombie businesses in the regions has existed in various guises under previous Govts too). If the regions can't stand on their own two feet they need to fall over and then get up themselves before they learn to walk and run (btw - I live in the regions). When the coal-mine and prison closed in Ohura the worst we could have done was to prop up a bunch of zombie businesses there.

by Basil brush | 18th Aug 20, 9:23am 1597699395

(Unfortunately) fiscal policy has a large influence on business and it is only natural people discuss the topics in tandem. However I think we can all agree we don't need to spend all day talking about the politicians themselves and the cut of their jib.

by redcows1 | 18th Aug 20, 10:27am 1597703237

Many months ago I commented along with others on the need for a shift to a sustainable enconomy, the need to shift jobs in that direction. Part of sustainable is shift to a local focus, quit with the "just in time" economy we have so it has fat in the system to handle the hits.

by Kezza R | 18th Aug 20, 10:52am 1597704766

Agree but it seems that the current system (and Parties) are not capable of that.

by ham n eggs | 18th Aug 20, 12:37pm 1597711020

Local is great ... BUT
Debt doesnt do local
It does economies to scale

And we can see (worldwide) that new Debt issuance is all we have...

by PocketAces | 18th Aug 20, 10:59am 1597705195

As long as production becomes more and more corporatized, mechanized and centralized, there is not much can be done for creating work in regions. It does not take a genius to understand that.

by dollar_bill | 18th Aug 20, 9:27am 1597699649

According to the latest Trump utterances New Zealand tried to make him look bad - indefensible. How many are still twisting into dissonant knots over this grifter?

Although he is making tremendous savings in the USPS and making it the greatest it's ever been.He would have been the fastest pony express rider if we still used horses. Is there a way we could bring that back?

by Audaxes | 18th Aug 20, 9:27am 1597699657

China Was Biggest Dumper Of US Treasuries In June As Foreign Central Banks Resumed Selling

by Believer1980 | 18th Aug 20, 9:29am 1597699769

What is up with property market in Canada? why such rush to buy?

by StuckAtHome | 18th Aug 20, 9:42am 1597700539

I suspect a realisation that the cards are stacked. Not sure how this is all going to end, but regardless it isn't going to be a pleasant outcome for anybody.

by powerdownkiwi | 18th Aug 20, 9:55am 1597701327

I'm told the move is away from high-rise and into having some space around.

Makes sense

by Believer1980 | 18th Aug 20, 10:01am 1597701676

But the average price data in the article linked in this post clearly shows that prices of all types of properties (apartments, townhouses and houses) have moved up in mirroring proportions. If that was the case, shouldnt there be a faster pace of price inflation for houses than apartments?

by iconoclast | 18th Aug 20, 10:57am 1597705079

I suspect both the proletariat and deep-pockets have come to the conclusion that QE is going to result in mucho inflation

by murray86 | 18th Aug 20, 11:11am 1597705897

MMT states that unrestrained Government spending will cause inflation. This is why the question of tax should be debated. why do we tax, and for what purpose. Under MMT tax is used to control inflation, and manage behaviour.

Proof is in the private banking sector and housing; the banks have essentially had an unlimited licence to create credit/money which they have loaned out primarily into the property market. In the last 20 years this has resulted in unrestrained inflation in the property/housing markets. The consequence that is now up front under COVID is a fear of collapse of that market.

by Believer1980 | 18th Aug 20, 11:37am 1597707442

Murray86, the banks never had the license to issue credit as much as they wanted. Central banks have all the tools needed to create as much barrier as they liked to in the banks way. In NZ the RBNZ is the banks prudential supervisor, they can (and have) determine the appropriate risk appetites a bank can assume, who they can lend to and by how much etc. The central banks have decided that what is going on is appropriate and does not warrant their intervention. You may disagree with that notion and state that the current circumstances clearly shows that intervention was needed, and you may be right. But that is a totally different story. Again, banks never had any license to create as much money they like, they needed (and received) the RBNZ (in NZ and equivalent institutes overseas) blessing and permission.

by murray86 | 18th Aug 20, 12:30pm 1597710641

alright, a little too much. Currently the permitted ratio is 12.5, up from 8 on capital. and most of it goes into property.

by brisket | 18th Aug 20, 10:08am 1597702126

Could ask the same about Auckland.
I suspect it's fear of an asset and/or currency collapse -- you might make a loss on a property, but it doesn't risk going near zero like equities or FX. Current crisis also indicates that no central bank anywhere is going to raise rates. It's Japanification - but unlike the Japanese in the 90s, we can't send our capital overseas to earn some interest. There's no safe arbitrage. Hence gold, hence property, even if it's already horribly overpriced.

by Andrewj | 18th Aug 20, 10:06am 1597701964

SHTF
https://wolfstreet.com/2020/08/17/mortgage-delinquencies-jump-by-most-e…

by Chairman Moa | 18th Aug 20, 10:31am 1597703475

Judith should do a mass give away of blue baseball cap with 'Make NZ Great Again"

by Kezza R | 18th Aug 20, 11:01am 1597705265

Agree and Jacinda could give out marshmallow and kumbaya lyric sheets.
That is the state of NZ political arena at present and we actually put up with it. That is some serious muppetization of the population that we have.

by iconoclast | 18th Aug 20, 2:03pm 1597716221

How many National electorate seats did you nominate for? You could put your opinions to better use.

by RickStrauss | 18th Aug 20, 1:00pm 1597712459

One only needs to view the Facebook ranting pre, during and after the lockdowns to have first hand evidence of the muppetization of the population. Seems American-style dirty politics and media propaganda have worked a treat here too.

by Chairman Moa | 18th Aug 20, 2:15pm 1597716934

Can we have the marshmallow toasted using party manifest from the Nat?

by delboy | 18th Aug 20, 12:39pm 1597711161

MAGA Make Ardern Go Away.

by Chairman Moa | 18th Aug 20, 3:26pm 1597721204

MAGA or TROC (the Return of Collins)

by Foyle | 18th Aug 20, 2:47pm 1597718839

last time we had this many cases coming in daily was mid April, from where it took about a month to come back to level 2. Is that what Auckland has to look forward to again this time round?