US Fed shifts policy emphasis; US personal incomes fall; China profits fall but electricity use rises; Taiwan confidence rises; Aussie capex drops; UST 10yr yield at 0.75%; oil and gold soft; NZ$1 = 66.4 USc; TWI-5 = 69.4

US Fed shifts policy emphasis; US personal incomes fall; China profits fall but electricity use rises; Taiwan confidence rises; Aussie capex drops; UST 10yr yield at 0.75%; oil and gold soft; NZ$1 = 66.4 USc; TWI-5 = 69.4

Here's our summary of key economic events overnight that affect New Zealand, with news of more jobs pain.

But first in the US, at the virtual Jackson Hole symposium this year the Fed boss has signaled a significant shift in its approach to managing inflation, as it tries to do more to aid the US economy's recovery. Essentially, it is a shift to lower rates for longer. They will now target an "average" of 2% inflation, rather than making 2% a fixed goal, giving it more flexibility to focus on its jobs mandate.

And they do have a real problem there. Last week they reported just over +1 mln new unemployment claims were received - about as expected - but the net number of people on jobless benefits fell by -223,000. So that means more than 1.2 mln people fell off qualification either because the found employment or their qualification for support expired. It is this second reason that worries analysts and will undermine consumer demand.

Meanwhile, personal income fell for a second consecutive month while personal spending rose. It is a trend that can't be sustained.

Meanwhile, the American housing market is taking off and joining the asset price inflation surge. Pending home sales were more than +15% higher in July than the same month in 2019, and median single family home prices rose +8.5% year-on-year.

And we should note that the SEC is looking into a popular practice by large companies of using "supply chain financing" arrangements. Their key concern is that it keeps significant liabilities understated in their books.

In China, industrial profits fell more than -8% in July compared with the same month in 2019. But that was held down by a massive -24% drop by state owned enterprises. Foreign-owned companies did best, down about -3%. Despite all that, July is the 'best' month in 2020.

And China is reporting that electricity consumption levels in August are at record highs, more evidence of a good rebound in their wider economy.

Taiwan consumer confidence improved in August from July but the rise was modest and is still net negative however. Only views that it is "a good time to buy durable goods" enabled the improvement.

In Hong Kong, HSBC seems to have frozen the bank accounts of media executives that don't toe the PRC line.

In Australia, commitments to new capital expenditure, the necessary component of future expansion, fell in the June quarter by more than -11% and for plant and machinery, the components of improving productivity, the fall was -14% compared with the same quarter in 2019.

Back in New York, the S&P500 is up +0.4% today in late trade. They follow Europe where most exchanges were down about -0.7%. Yesterday, Shanghai was up +.06%, while both Hong Kong and Tokyo were lower on the day. The ASX200 also closed up +0.2% while the NZX50 Capital Index also rose +0.2% but was offline early after the cyber attack extended to a third day.

The latest global compilation of COVID-19 data is here. The global tally is 24,267,000, up +288,000 since when we last checked this time yesterday. Global deaths reported now exceed 827,000 (+6,000 in a day).

Just under a quarter of all reported cases globally are in the US, which is up +48,000 since yesterday to 6,020,000 and a relentless rise. US deaths are now just over 184,000 and a death rate of 556/mln (+4/mln). The net number of people actively infected in the US fell overnight to 2,514,000, so back to slightly more recoveries than new infections.

In Australia, there have now been 25,322 COVID-19 cases reported, another +117 overnight, and mostly in Victoria. Australia's death count is up to 572 (+23). Their recovery rate is up to just over 80%. There are 4389 active cases in Australia (-172) indicating a turned tide and more recoveries than new infections.

The UST 10yr yield is +6 bps higher today at 0.75% continuing its volatility. Their 2-10 curve is steeper at +58 bps. Their 1-5 curve is up marginally at +18 bps, while their 3m-10yr curve is also steeper at +66 bps. The Aussie Govt 10yr yield is up +3 bps at 0.96%. The China Govt 10yr is also up and by +1 bp at 3.08%. But the NZ Govt 10 yr yield has slipped -1 bp to 0.57%.

The price of gold has fallen back solidly overnight, down -US$19 to US$1,928/oz and essentially reversing all of yesterday's gain.

Oil prices are softer today at just under US$43/bbl in the US while the international price is just on US$45/bbl.

And the Kiwi dollar is firmer again this morning, up to 66.4 USc. Against the Australian dollar we are a little firmer too, at 91.5 AUc. Against the euro we are up to 56.2 euro cents. That means our TWI-5 is up to 69.4 and back to where it was in early August.

The bitcoin price is down -2.6% from this time yesterday at US$11,171. The bitcoin rate is charted in the exchange rate set below.

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156 Comments

13
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Messaging with someone yesterday about civil rights principles & what became clear to me is that propaganda is the process of manipulating your thoughts so you feel strongly enough about something to suspend principles.

Thats what both sides of the argument say.

Very true. As sides get more polarised they tend to characterise the entirety of the "wrong" side as resembling its most nutty and extreme members' viewpoints. Dialog becomes more and more difficult because everyone keeps busy standing up and burning down caricatures and straw men.

Scarfie is straight up voting NZ Peoples Party / Advance NZ this election.

11
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Those who have been around here a while know I don't vote. Democracy is an illusion. Generally I stay clear of the political debate every 3 years, it is pretty inane and tiresome. Sort of descends to children in the school yard mentality, my dad is tougher than yours.

Billy is interesting though, I saw the claim he is #3 ranked for preferred prime minister now. Haven't seen that corroborated. However I think he will make inroads to the NZFirst vote when it comes to capturing the conspiracy theorists.

Billy TK is only the 3rd(?) preferred prime minister when you round up all the options sitting under 1% support to 1% - that is a quinessential piece of propaganda on the NZPP's part. Very ironic.

But agree, you captured the nature of politics very well with that analogy.

Scarifie
You let yourself down.
“I haven’t seen that corroborated” isn’t something Billy and Advance NZ are concerned about - just believe it and keep repeating it, and then it must be true. :)

If you follow what is happening overseas then anything is possible, Greece, Italy, Spain, Trump. Anything is possible, so it is of significant interest in that context. The experiences in those countries is also an answer to the comment below, they are trends within voting patterns that have changed based on underlying fundamentals that really have little to do with the politicians.

12
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scarfie,

"Democracy is an illusion". I try hard not to get angry on this site, but that makes my blood boil. Of course the democracy we have is very far from perfect and always will be, but literally billions of people round the world would love the opportunity to live under it.

To think that people like my father and perhaps yours, fought to allow oafs like you to have the right to spout such garbage.

17
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The universities are spewing out brainwashed, communist, woke, violent, entitled, selfish and vile zombies...... It's going to get much worse.

Is that you Donald?...

Certainly seems as out of touch with reality and as in touch with caricature and conspiracy theories.

Brainwashed... arguably. Communist... a few, really just the sociology dept's... Woke... mostly.
Violent..???? Any examples? I haven't seen Communist gangs shooting or beating people at the UoA.
Entitled... not a chance of beating the Boomers at that. Likewise selfish.
Vile... young people today are far more polite and considerate than when I was a young student, which was only 15yrs ago. Seriously, they're like nanas, they hardly even drink, much less the antisocial antics that we used to get up to.

But they are taught by Boomers? Unless the professors are under 21 who is feeding them this crap?

If you don't want the youth's ideology lurching to the far left, then fix the worsening problems we're dealing with Capitalism.

Rather than calling anyone who criticises Capitalism a Communist.

This. If the current powers that be keep on in this direction and refuse to adequately address the worsening inequality, they will only have themselves to blame for pushing their youth towards the far left. At present they seem hardly aware of this issue.

Far left, yada yada yada. It's remarkable how in resistance to the far left we never see those moaning about a potential shift to the far left standing up for getting rid of their subsidies and their non-means tested welfare.

It's bizarre that the idea younger generations should have opportunities the older generations did in their turn, is seen as far left. Seems out of touch with reality, a moaning based on caricature not reality.

You're quite right. It shouldn't be considered far left at all. It is a sad indication of just how far gone we are. But I am referring to the very real possibility that we are pushing a growing number of people towards such a backlash, that it could result in some ugly extremes that we may all regret. I can think of a few examples where addressing such deep rooted inequality, resulted in something far worse. Yet many don't think that is a concern here.

I am likely considered far left myself by many. I am absolutely disgusted with the state of pretty much everything. We would need to see change on a massive scale, before we can consider that such disgraceful inequality is being addressed at all.

It's always a danger to society when anti-intellectualism rears its ugly head.

I find it's far more dangerous when politics has control over intellectualism

It's an amazing grand conspiracy, for sure. It's incredible so many people are in on the mass indoctrination plan and it never collapses.

And over so many decades - centuries, even - and geographies. Impressive indeed.

there's only one brain that needs washing because it seems to be clogged up with irrational logic

democracy only works in times of plenty
so it is an illusion now

All political systems are about allocation of resources, how it is done and who gets it. So thumbs up from me. They lose power at the periphery first as the supply chains get too long to defend.

11
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Wow, come into your home without warrant and remove your child. That is pretty scary. That will be preparing the way for mandatory vaccine.

We've got our own dilution of a mans home is his castle within the Covid Act.

The question is always what right do you want to give up next. The woman I refer to above, intelligent, old classmate & scripwriter by profession, was all over exceptions to principle until I raised equal rights for woman.

oranga tamariki - ever heard of it?

You have to have previous domestic violence or negligence issues though

It is called section 41 of the crimes act, but the threshold is pretty high. We are now talking about something altogether different.

Australia is making some very strange and dangerous moves to “control” the population. Very unsettling over there at the moment and will probably get much, much worse.

Their police force are far more confrontational/aggressive than ours. I think that's something our police force should pride themselves on

Australia have always been happy to do that. There's very much of the "old country" command and control embedded in the culture.

15
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How is this news Scarfie? Did you seriously spend your whole life ignorant of human behaviour and then just have a light bulb moment yesterday?
1. Principles are always in a state of flux across the millennium's, centuries and decades. They tend not even to be all that rigid within one persons lifetime. They are influenced by the social narrative and people who are perceived to have status and status/virtue signalling behaviour.
2. Propaganda is normal. It has always existed. It is a function of human social psychology. (see Ancient Egyptian propaganda on the Battle of Kadesh (3294 years ago), Daris I's Behistun Inscription (2535 years ago), anything by Livy about the Julio-Claudian dynasty of Ancient Rome (2050 ish years ago), anything about the Catholic church and crusades in the medieval era, etc).

Our brains are hard wired for it neurologically and this has been conclusively demonstrated in numerous neurological studies over the last several decades. Some of us are predisposed to be influenced and some of us to doing the influencing. Manipulating each other has actually been an evolutionary arms race and we have evolved traits to become more adept at lying and manipulating each other.

The only way you can even remotely avoid this in your own brain is to scrutinise everything and become rational af, but then you end up a mistranthropic bore like me, so choose your poison.

That's why it's best to sit on the fence. That way you can join whatever side is going to win and not be slaughtered (historically speaking).

A lot of people are busy blasting their increasingly extreme political views (on both sides of the political spectrum) all over social media too, ideas are now easily amplified and contagious.

Whichever side wins, they will have all the evidence they need to easily identify their opposition.

Its foolish to give yourself away in the early stages.

Try growing a pair, you might find living on your feet is better than on your knees.

I believe the quote goes its better to die on your feet than live on your knees

The cold hand of evolution disagrees. Procreation is what matters

It sure does, as do the most useful adaptations to the environment.

Good post. I've been known to be provocative on here just to see what comes out, this is one of those days. This site was awesome ten years ago, some really cool discussions. It has become less good of late as some of the better minds moved on (some sadly passing, the late Walter Kunst whom I had the pleasure to meet in person. I'm hoping Christov (The Count) is still with us, but I suspect not). Some other good minds still do the odd fly by.

This was definitely one of those provacative posts, trying to get people to think and question. Doesn't always work, but if I get one person to question their beliefs then it is a success.

My struggle is one for clarity of thought, and then to convey the things I see in words. I'm a designer, I form ideas in 3D when at my best, so translating thoughts to symantics, or symbols, is what I do for others more than myself as the thought is usually clear to me at that point. I try to boil things down to basics, which is what I've done with the revision of the quantity theory of money.

Today I'm mildly surprised at a good show today :-) Even the ones I disagree with add a lot of value.

PS. I am an INTP "thinker", it is simply what I do.

I recently had the chance to do career coaching and scored INTJ. I found the whole experience very uplifting and would recommend it to anyone looking for direction.

I can work most peoples types out with enough time with them. This place is dominated by *NT*'s and *ST*'s. I've posted on the topic from time to time. Of interest is that 73% of people are Sensing, and don't really have a clue about anything. It is predictive, so very useful. A great tool for a youngster seeking careers guidance. If not what to do, certainly what to avoid. I should never have been a cop.

It is definitely a very useful tool for that purpose. Have been tested a few times now. INFP. I know I should quit this place.

Among bad news / data - one srctor stands out and that is Housing not only in NZ but in most countries

Yes it does stand out because the majority of people need debt, lots of debt to buy it.

Demand for housing tends to drive growth in several other key industries of an economy: rental and real estate services, financial services, construction, building materials and electronics, engineering & technical services, local administration, and equipment leasing to name a few.

These sectors are also among the few surviving ones in NZ that hire skilled to high-skilled workers. So I do hope house prices hold out in our major economic centres but rampant price inflation will simply worsen the eventual collapse.

With proper sector planning and reforms, the government can perhaps ensure sharp price increases in property values aren't the only way construction projects prove to be financially feasible.

"And they do have a real problem there" with Inflation being 'allowed to overshoot. Sure do.
Yesterday Andrewj posted a video of all the erroneous calls made over the last decade or so; all calling for a resumption of play as usual - that failed, and Powells' call today outdoes them all.

Hard to see what he actually means. Their policies of low interest rates have failed to create jobs other than part time, low paid ones and overpaid public company exec ones. Sounds a bit like "whatever it takes" in Europe, which made a big show of destroying the economy while doing just enuff to stop the banks imploding. Towering achievements like lending money to Greece on the basis that it was all used to repay French and German bank debt, sod the people. Presumably Powell's speech is code for those in the know. Perhaps he means he will buy as much government debt as required, however much that is, thus greenlighting massive fiscal overspending on whatever daft ideas the politicians see fit to waste it on.

Yeah, it looks like the global political class have looked at Japan and Europe, shrugged, and said "yeah, looks OK, why not?"
Or, the lesson they learned from 2008 was: don't let the first brick fall! Prop up every bank and every asset class to avoid nastiness.
If I had control of, say, Paraguay, I'd raise interest rates to 5%; watch the endless trillions roll in; and use the now-mighty Paraguayan dollar to purchase every tangible asset in the world. One could buy an empire very cheaply and have a population living in Saudi splendour for decades to come.

"If I had control of, say, Paraguay New Zealand, I'd raise interest rates to 5%; watch the endless trillions roll in....'
Looks good to me!
And guess what? It would be so obvious that the trillions would be on their way that there'd be front-runners investing all sorts of financing cash in assets that today are struggling ( say, Air NZ). Isn't that what we really want?

import all the inflation and not the wage inflation while making debt impossibly hard to service?
sounds like a recipe for a banana republic

Except that you have ownership of a very large number of productive assets

Can Australia ever achieve elimination?
When can the trans-Tasman travel bubble concept re-emerge?

can anyone?

We've been remarkably successful at eradicating or massively reducing the prevalence of many contagious diseases over the last 100 years. The best minds in the world are working on it, several vaccines are in their last trial phases. 1 case in 23 million cases of confirmed reinfection since late 2019 indicates that a vaccine can keep in top of the mutation rate.

Your pessimism is really overblown.

PSA.

Time to dig through these shovel ready projects.
Who knew they would be liable for audit so quickly, who knew it would be auditors and accountants that would get the jobs first.

While the Greens support and bathe in the approval glory, who approved this private venture funding?

The Ministry of Education must have been distracted that cabinet day (perfect part time performance).

What more interesting funding stories, windfall happiness will we learn about?

https://i.stuff.co.nz/national/politics/300093441/james-shaw-calls-meeti...

shout out to dictator, was this your $12 million project?

It wasn't me. No the project I'm working on benefits the general public rather than a privileged minority.

A private school with fees ranging between 16-43k per year, receiving 11.7 million in taxpayer funds. Moral hazard anyone???
This may be one of the great modern day virtue signals lol

Just classic political hypocrisy and lying. I had thought more highly of James Shaw than this. Luckily, I never had a high opinion of Hipkins. This will reflect badly on The Greens at election time.
On a closely related note, why not spend that money on trying to make education in all schools a bit greener?

Exactly. The Greens bang on about inequality and child poverty, yet they fork out 11.7 million to an exclusive school for rich "eco" kids

Some animals are more equal than others. Watermelons are always happy to fritter away other people's money on their hobby horses.

10
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I was also thinking, more tongue in cheek, that why do half measures with mandatory facemasks, bring back the burqa.

I love a bit of tongue in cheek casual mocking of someone else's religion. Especially in the context of recent massacres. My you are witty.

11
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The religions that can't take a bit of mockery and lampooning are the ones to be scared and careful of. Especially if they have, "useful idiots" helping them along.

13
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I don't think equating face mask wearing in a pandemic with religious fundamentalism is funny personally. The intention of Scarfie's comment is to mock mask wearing not to critique Islam.

And all religions are scary. They give people the excuse to absolve personal responsibility and morals to an invisible friend. And very often a supernatural invisible friend who allegedly spoke to some proxy thousands of years ago (which also can't be verified).

Don't be so precious. Religions need steadfast criticism to stop their bad ideas getting too deeply rooted and acceptable. That's particularly true of the ones that aggressively and at times violently subjugate the freedoms of those born under their control. Mocking is part of that.

Rabobank's Michael Every had a more pragmatic criticism:

Does anyone think this will work to generate inflation and jobs in the US economy? No. Is the cost of borrowing really the problem now? No. Is anybody pricing in a rate hike for at least five years? No. If they were to make that ten years would it make a firm any more likely to hire someone right now? No. Has YCC worked to create reflation in Japan? No. Yes, at the margin it’s USD negative in that it implies future yields would not be allowed to rise even if inflation did: but presumably once (IF!) inflation (and WAGES!) rise sustainably, the Fed will just hold another Jackson Hole speech and change its operating framework again.

https://www.zerohedge.com/markets/never-ending-monetary-accomodation-her...

So this article says that cases are rising but not deaths therefore current fears about a 2nd wave are overstated. Would be great if there was no second wave but I don't think it's irrational to worry about one. Especially if cases are rising. Doesn't matter the age of cases because with a highly infectious new virus the more people who contract it, the more likely it is to spread to the vulnerable. This professor isn't saying there won't be a 2nd wave just that's it's too early to call a 2nd wave now. Pandemics do often come in recurrent waves so it remains a strong possibility.

AJ, My sister sent me this
Says the same as ur link but also discusses the SARS virus and a second wave, also discusses seasonal impacts.
https://www.youtube.com/watch?v=FU3OibcindQ

Ivor's great love his analytical approach to things.

10
up

And China and the US are inching closer to coming to blows in the South China Sea.

Taiwan, Philippines, Indonesia, Viet Nam, Japan and Australia all sit on a knife edge here. We will not be able to avoid being involved or the fallout (Fallout - hopefully not literally)

Just hope then, President Trump’s bed side reading of late, doesn’t include ex Prime Minister Thatcher’s account as to how The Falklands war saved her prime ministership.

That's just the kind of distraction he'd likely use. Scary thought. I'd hope the JCS is headed by someone with enough balls to put their career on the line and be able to say NO to the CiC.

Trumpie has a history of trying to get out of military incursions and presence wherever possible. His, USA's, and our problem is the all powerful Industrial Military Complex in the US which has it's priorities and goals, totally different from his and the US people's.

Yes but he's looking to be re-elected. He's got to be to avoid the feds knocking on his door to have some chats about his actions while in office, after he's left.

Don't worry. He doesn't read.

True. And he did suggest before he was in power that Obama would use conflict with Iran to enhance his election prospects. Then Trump himself used the assassination of an Iranian general to benefit himself politically. So I don't see that he's opposed to thinking of and even using military action to improve his chances.

That is the one - and very much only - thing I'll give Trump credit for. He likes to talk tough, but I think he has a very fixed idea that it's best to avoid war, and he's done so thus far despite the built-in DC establishment preference for it.

He is also a wimp..sharks and Windmills scare the bejesus out of him

I suggest you read Bolton's book - it's just a marketing ploy - Trump doesn't have a clue about anything other than promoting his toxic brand via small time grifting

Have you missed the last century or something Vlad - good luck without it.

DP

President Trump reading a book? Haha! Maybe if they air it on Fox news, or Kanye tweets it.

There will be no war - The US is not equipped to take on the alliance of Russia and China.

The American way of warfare assumes unchallenged air superiority and reliable communications. What would happen if the complacent US forces meet serious integrated air defence and genuine electronic warfare capabilities? The little they have seen of Russian EW capabilities in Syria and Ukraine has made their “eyes water“; some foresee a “Waterloo” in the South China Sea. Countries on Washington’s target list know its dependence. Link

If the US population can be persuaded that China and Russia are a threat they'd have a nice excuse for a giant deficit spend on the military over the next few years though wouldn't they?

The error here is that you are assuming that the US will be the instigator (protagonist - antagonist depending on perspective), but what if China pushes the button? They may think that they are in a position to win, and now is the time to win. The US forces are, as you indicate, highly dependent on a cohesive, advanced technology based force structure. But if China can either match that or disrupt it, the US will be very vulnerable. As you have indicated in the past the US in their exercises don't look favourably on people who can think outside the box and find ways to disrupt or neutralise technological advantages. But one of the prime rules of warfare are that if you ain't cheatin', you ain't tryin'!

I don't think Russia will necessarily jump in with China. More likely Putin will use the distraction to move in western Europe.

Three military maxims. Don’t march on Moscow. Don’t invade Afghanistan. Don’t engage in a land war in China. If China is to commence hostilities it will play to its strength, on land. The Korean peninsular is therefore handy. Firstly they have experience there. Secondly Nth Korea can be prodded into provoking it, there is only a truce in place after all.

A cost benefit analysis of 5 extra days at COVID-19 alert level 4
"Alternatively expressed, X5D results in, at best, 239 QALYs gained (including the value of 30 COVID-19 deaths avoided). This benefit comes at a substantial cost: $749 million (or equivalently, 22,692 QALYs lost)."
https://www.productivity.govt.nz/assets/Documents/cost-benefit-analysis-...

10
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Fine. We'll let you personally choose those who are going to die.

Typical oldbloke1 hysterical comment.

10
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Hysterical? Seems pretty on the money to me..and the overall death rate is down in NZ over all age groups. But hey let Covid loose and let the chips fall as they may, anything for the debt fueled "economy".

The death rate would certainly plummet, at least in the short term, if we all stay at home and never venture out again.

Maybe this is the new normal? The Boomers might need to stay in more...cruise ships banned, the environment could take a break that for sure. Rattling around in those big multi million dollar homes must get boring with out gold card visits to town and a show?

The bigger and more expensive home the better I would imagine. Boomers are going to hold onto their spacious homes and stay in them until the very end so it will be good to have the room to rattle about in and a section to walk about. Pity those that bought apartments or who are at the mercy of the retirement village.

Less than 200 cases yet 10 in hospital and 3 in ICU.

Let her rip, no problem.

In Singapore only 3 per 1000 have ended up in ICU with most surviving.

If a govt wastes money on bad policy it costs lives because we don't have as much money to pay for the social programs and health systems we would be able to afford if the govt had more money. Starkest demonstration of this is the Qaly system of funding used by Pharmac, but extends to other things like poorer roads with more deaths and more drownings (because school pools no longer funded). Just because those who are dying as a result aren't trumpeted by the media the same as a wuflu death doesn't mean they aren't real people.

OB1, but don't you care about our children?

OB1 you could apply the same logic to the costs of keeping “him who shall not be named in prison” for life against those who die because the Govt/Pharmac did not get the medication they required and for those who suffer in pain because they did not get life enhancing operations. Your choice who should we direct our limited funding to, a mass murderer or your fellow kiwi?

I'm just back from the South Island with lots to talk about, visited mate with farming interests in South America, one of my best mates lives in Chiloe. He has interests in Brazil. Brazil it's a potential monster disrupter but it's full of corruption and horrible inequality. Brazil is now exporting lots of beef into China and the USA and could be a game changer.

My Lupin guy was fun, he's dropping merino numbers and going into more beef, had some great years.
Wallabies have arrived in the Mackenzie basin, that will be an issue. Doc have cut all the wilding pines that you can see from the road but drive in a bit and lots more untouched.

Friends with irrigation have lots of new gear but never pay any tax. Seed guy i use was great, he's getting more into regenerative farming, be great if we could find a way to encourage older farmers to lease to young guys, a capital gains tax will do that ( being Cynical) . thinking over lots of new ideas especially regards pasture mixes.

Got back to 14mm in the rain gauge and a big frost, cattle are not interested in the crop so spring is here, they wander over in their own time. MIxed winter crop is up to fence, needs flattening for the electric wire.
Looking at the trees it's going to be an early bud burst.

https://www.beefcentral.com/trade/south-american-exports-slowly-encroach...

USA is shipping loads of Soy to China
https://www.zerohedge.com/commodities/soy-boom-china-could-buy-record-am...

Andrewj - You touched briefly on a significant issue for the future of NZ farming.
There is a constant refrain in NZ of how "NZ farmers are the best low cost producers in the world".
We are NOT.
We are just lucky enough to have one of the least corrupt political systems in the world that allows our produce to arrive overseas at a competitive price.
If South America and parts of the old Russia / East Europe regions got their act together we would be toast.

Agree Wilco, we are not the low cost producers some espouse, and haven't been for a long time.
Did you see the DairyNZ, Jamie McKay facilitated, Q & A session, The View from the Cowshed, with James Shaw, Damien O'Connor, David Bennett and Mark Patterson? Its on the DairyNZ facebook page.

The problem is countries want to catch the value add part of agriculture themselves rather than import it. Exception could be countries like Japan and China.

Wallabies have the potential to be equally destructive as rabbits.
The issue with leasing I hear is that the old guys, in some, cases want the equivalent in mortgage repayments for their leases, so doesn't pay young farmers to lease. In other cases there are some truly philanthropic farmers out there helping younger farmers via leasing, especially where there is no family succession occurring.
Good to hear spring is starting well for you.

Wallabies are also becoming a serious problem in the Bay of Plenty region. Also been anecdotal reports of the Hawkes Bay experiencing spillover from the neighbouring BOP population.

When we farmed in the Central Plateau over 20years ago there were wallabies in our district, so can understand why they are a growing issue on BOP. They could do some damage to vehicles if you hit them on the road at night.
We are seeing possums in our area here in Central Otago that weren't here when we came. In Australia they can do serious damage to fruit orchards, so they have to fence them out. Hopefully they don't get to that stage here.

Wow I never knew they were in the Central Plateau, although its a big area. Where abouts were you farming?

South Rotorua, not Reporoa.

Just found this poem the other day in my reading to get a better understanding of what NZ farmers are facing as a result of our last few decades' approach.

Magpies, Updated

Tom and Elizabeth's grandsons
bought the farm at a mortgagee sale.

Most of the old pine windbreaks
blew down in a winter gale,

And when they felled the standing pines
the magpies fled.

'Borrow more money. Diversify!'
the mortgage people said.

Day in day out they laboured
while irrigators spread,

bought a thousand cows on credit,
build a computerised milking shed.

'Rely on market forces!'
farm advisers said.

The farm's still there but now it's owned
by a foreign bank instead.

And I've seen two magpies nesting
in that pine tree overhead.

- Waiata Dawn Davies

Also to add, we're at serious risk of vast areas of productive horticultural/agricultural being irreversibly changed into pine forests.

Billy TK is the only politician who's father made an album I bought. $4.50, I think. Human Instinct were very good British Blues from memory. Must get it out again.
Any other politicos got ancestors who made good music? Could swing a few votes.

The US Fed to ignore inflation to get more jobs
Inflation has been ignoring the Fed for a decade

my question is " how much damage will they do on their road to irrelevance"

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." ~ Ludwig von Mises

The Fed is not the central banker for the world - hence we depend on the will of G-SIBs to re-activate their eurodollar practices.

We don't live in a world dominated by Austrian economics anymore - those rules are irrelevant at present

It's Keynesian economics on steroids right now... until death do the currency apart

Well, other than that Keynes also advocated lowering taxes to stimulate out of depression too. So far there has only been the tiniest bit of tax tinkering from the gov but nothing substantive.

AJ... great quote.
For me, this is so... so true..
Govts. and Central Banks are heading us towards the second outcome.

The greatest destructive force on earth today is the federal reserve. They want to own the world. They are in charge. There will be no global recovery Just a transfer of wealth to the super rich. The dollar will lose value and go to zero. That is what they want before a new crypto based currency is introduced. The world as we know it has changed forever. Just did a quick search on the Herald can’t see any coverage on the Feds news. Nothing!

And here we are with a systems check.
See the video, the poor old part time Health Minister needed be nursed along by the PM.
- sinking not waving.

7https://www.newshub.co.nz/home/politics/2020/08/coronavirus-covid-19-con...

The Government was still falling short on contact tracing targets a week ago - 10 days into the current COVID outbreak.

But it says the data is skewed by early cases and the next batch will look better.

# Looks are everything

22
up

All my children are in NZ at present, boy are we having interesting discussions.
NZ is so expensive none of them know how they will survive here. Every day they try to reason a way through this high cost economy. Their friends have student debts that are making them not much more than peasants.
Housing costs are top of the problem, followed by electricity, food, rates and on and on. This system is breaking, the young will not tolerate the poverty being forced on them.

Can't see it changing in a hurry Andrew. Successive Governments have built it that way.

I don't know how much longer people will keep taking the blue pill. Even the guy in Christchurch who has been labeled a terrorist, I suspect he was actually an anti immigration Nationalist, but we are not mature enough obviously to have that discussion.
One daughter got offered a job but after student loan deductions and tax she could hardly even paay board.

I agree with your characterisation of him, but I also think he was really too stupid to understand it himself or else he may have tried a different approach. Some one else said it in one these forums a while back - haters gotta hate! Scary thing is, there are lots more like him out there looking for an excuse.

10
up

if you are struggling to get a decent job, living in an expensive Kiwi box, feeling disenfranchised from politics and society there will be problems. If you see Regional councils walking all over your private property rights,while favouring big corporates, rocketing costs, looking for an answers but nothing in sight
More and more of us are slipping into that cohort there will be trouble.

The biggest problem in my opinion is that the housing market has greatly enriched one group (boomers) while greatly impoverishing another group (young). Pick your winner. Either way one group has to lose.

This is where so much of the current inequality is stemming from. Renters are currently cannon fodder and with increasing prices it's going to get harder for people to escape poverty and break free from living under the thumb of the rentier class.

Exactly Andrewj! See it first in the US and beginning to feel it’s not far off in Aussie. I’m sure the NZ media will do it’s best to not give it much if any airtime though. It’s a part of the cycle we are in and largely unavoidable.

David Runciman makes the interesting point in his book on democracy that one of the reasons change does not occur is because society is so much less violent than it was in the past, in both the international (war) and domestic spheres. Violence has helped drive change in the past, whereas there's precious little of it now. And coups are more often finance-sector driven and behind the scenes, not generals turfing out politicians.

Perhaps it suggests that unless people get angry enough there won't be much impetus to change, and finance will have disproportionately more influence on government decisions over and above the needs of wider generations of NZers.

"unless people get angry enough there won't be much impetus to change" very true. The problem is that if people get angry enough to act, and there is violence, the very first victims are usually the innocents. look at America, it is not those who created the mess that are suffering or even admitting the need for change. It's got to get a whole lot worse before any change will be considered.

If you want to reduce costs you need to eviscerate regulatory burdens that have been piled onto everything, particularly construction and local govt sectors over last 30 years. The only realistic way that can happen is with a large ACT party in govt.

10
up

the biggest problem is housing and no government has been prepared to stand up and deal with it, they just let the bubble grow. Unaffordable housing will cause civil unrest.

There is reason to hope that the zoomification of work - moving jobs to home, will reduce the utility of city living and take away the escalation in house prices that produces. That process will be aided by arrival of autonomous cars and air taxis in a few years. In 15 years it may not matter to your career progression if you live 100km from the CBD. Away from cities a new house only costs $600k, and that could halve once factory built houses (from Zuru) come to market in a couple of years too.

Immigration is inflating house prices around me and I'm in a small rural town 40 minutes from a city.

Immigration from Auckland/Wellington, you mean?

no the UK seems to be dominant in our housing at present

The side effect being it'll continue to exacerbate house prices in the regions

Man - I knew ACT was short of a sandwich but this is some seriously deluded mixed up thinking

You cant unleverage a Ponzi .. the irony in your argument being ACT philosophy is to slash all safeguards to Ponzi up further ....
Cities are about most efficient means of maximising consumption ... LEVERAGE through Debt to elevate commodities
Noticed by chance when Auckland is locked down it suddenly doesn't produce anything? Apart from angry cafe owners

The solution then? Autonomous vehicles & air taxis!
Hmmm
Simple

ACT is also not planning to unwind welfare subsidies to property investment, another problem.

For a whole generation it's been 'a good problem to have', until they reach the point where, like you, their own children are screwed. My own MiL is like this -- she's gone from being politically disinterested (and a landlord!) to raving socialist, having seen how her friends have become millionaires
but her children can't afford to live in the same city (or, crucially, have grandkids...)

"This system is breaking, the young will not tolerate the poverty being forced on them"

They dont have a choice - diminshing returns per capita is locked in
And that poverty (Debt burden) is the same thing underwriting boomer wealth

Even with diminishing resources it's naive to think that the distribution couldn't be improved to even things out a bit should the will be there.

but its actually the opposite of a distribution problem
Asset appreciation is about an economy that isnt growing in deliverable resources
Per capita is the key
the reason more spending power isnt more widely available is because it would collapse resource bases even faster

Yes and no. A lot of asset appreciation had been favored by tax and other government policy guaranteeing protection and high rates of return.

I do agree with you that a lack of viable productive options to invest in (due to natural limits) has also played a part, but I still think the asset appreciation has been turbo-charged through stupid legislation and economic philosophies of concurrent governments.

"has been turbo-charged through stupid legislation and economic philosophies .."

Absolutely
Its the low hanging fruit to being re-elected

It is definitely coming here. We will see this break out in other countries first I'm sure, but we are not immune to this nor should we be. Our media hardly gives it the time of day, mostly ignoring the rising discontent among our disenfranchised. It is beyond foolish to believe that this gap can continue to be widened without serious consequence. At least with our current course headed straight for that breaking point, we might finally have a chance at real change.

The NZX Depth Market was placed into halt at 9:58am.

Didn't even open today :(

NZX down for the 4th day
NZX claims due to DDoS distributed denail of service
The link here dated 22 August 2020 takes on more significance
https://www.interest.co.nz/news/106664/us-business-activity-rises-eu-los...

The NZX has two URL's
https://www.nzx.com and https://ww2.nzx.com

I am sceptical about the DDoS
Suspect a balls-up in the system upgrade done 2 August 2020
They were having troubles 3 weeks before the DDoS

Looks like it re-opened at 1:00 pm today

Well the market likes the Feds policies

As of today (2020-08-27), Tesla's share price is $2153.17. Tesla's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2020 was $1.92. Therefore, Tesla's PE Ratio for today is 1,121.44

TSLA has such a high P/E ratio. People must think that the stock has incredible future potential to pay the price that they are paying for it. (Maybe the "T" in Telsa stands for "tulip"?)

no it stands for Tradeable IP - Tesla may not make much money on their cars but VW will.