US jobless benefits expire fast; US house prices jump; China releases funds for global buyup; Goldman Sachs hit hard; confidence sapped in EU; UST 10y at 0.84%; oil firm and gold down; NZ$1 = 66.7 USc; TWI-5 = 69.9

US jobless benefits expire fast; US house prices jump; China releases funds for global buyup; Goldman Sachs hit hard; confidence sapped in EU; UST 10y at 0.84%; oil firm and gold down; NZ$1 = 66.7 USc; TWI-5 = 69.9

Here's our summary of key economic events overnight that affect New Zealand, with news rising house prices are becoming a signature global consequence of all the pandemic stimulus.

But first in the US, new unemployment benefit claims for last week came in quite a bit lower than expected at +787,000 when +860,000 was anticipated. But qualifications of those on these benefits is expiring much faster now. Last week, -1,024,000 people fell off these state programs. True, some will have found jobs but most will have seen their qualification expire. This is the second consecutive week where the fall exceeded -1 mln people.

Meanwhile, the American housing market is on a tear and to a 14 year high. Sales of existing homes in September rose +21% when compared to the same month a year ago, up 9.4% from August and much more than was expected (+5%). The median price rose to $311,800 (NZ$467,000) and that was up +15% in a year and an accelerating gain.

And the Kansas City Fed regional factory survey reported rising activity, but their activity index is still -12 points lower than at this time last year. At the same time, the shifting of manufacturing jobs to Mexico is gathering pace under the new-NAFTA, and companies controlled by billionaire Commerce Secretary Wilbur Ross are joining the trend out. This is more clear evidence a tariff war is a losing proposition.

China has signaled that it is getting ready to ramp up investment outside the country now that foreign assets are less expensive due in part to the international situation, and part due to the appreciating yuan.

Taiwan reported its September unemployment rate overnight and it was little-changed at a very low 3.8%.

Hong Kong reported its inflation rate overnight and they revealed deflation at a surprisingly level of -2.2%. But that was due mainly to a waiver of rents for low income families as the Government there tries to keep a lid on social unrest.

Regarding Malaysia, the local Goldman Sachs subsidiary has plead guilty in US court proceedings to its part in the 1MDB fraud committed with the previous Prime Minister. It has agreed to pay US$2.8 bln in penalties. That now adds up to about US$5 bln in penalties among many worldwide jurisdictions for these crimes. (The transaction that led to all this action netted Goldman about US$600 mln in fees.)

Consumer confidence in the EU turned down again in October, no doubt due to the worsening prospects as their pandemic bites with renewed vigour. That is very noticeable in Germany but will be mirrored in most others.

In Australia, mass uptake of rooftop solar (PV) systems coupled with changes in energy use due to the COVID-19 pandemic reduced national electricity demand in the third quarter of 2020. The Victorian lockdown was also a major factor. As a result, prices fell.

Wall Street has started today with the S&P500 up +0.5% in early afternoon trade as there is more confidence their stimulus talks will amount to some action. Overnight European markets were flat. Yesterday, Shanghai ended its Wednesday session down -0.4%, Hong Kong ended up +0.1%, and the large Tokyo exchange was down -0.7%. The ASX200 ended down -0.3% while the NZX50 ended down -0.2%.

The latest global compilation of COVID-19 data is here. The global tally is 41,397,000 and up a record +465,000 in one day. It is first-world countries that seem to be having the most difficulty containing the new wave. There is was a big jump in cases in the UK yesterday. Global deaths reported now exceed 1,134,000 (+7,000 per day).

The largest number of reported cases globally are still in the US, which rose +77,000 in yesterday's update to 8,608,000. They are clearly now in a third wave. The number of active cases is at 2,766,000 so many more new cases than recoveries. Their death total is over 228,000 and still rising at +1000 per day.

In Australia, there have now been 27,466 COVID-19 cases reported, and that is +22 more cases than we reported yesterday and new cases spread across the country. Deaths are unchanged at 905.

The UST 10yr yield is firmer again this morning by another +5 bps at just on 0.84%. Their 2-10 rate curve is noticeable steeper at +70 bps, their 1-5 curve is also steeper at +25 bps, along with their 3m-10 year curve, now up at +77 bps. The Australian Govt 10 year yield will start today with another +3 bps rise at 0.83%. The China Govt 10 year yield is down -3 bps at 3.19%. And the New Zealand Govt 10 year yield is down -1 bp at 0.58%.

The price of gold has fallen back from this time yesterday, down -US$22 and now at US$1902/oz.

Oil prices are a little firmer today, now at just on US$40.50/bbl in the US, while the international price is now just under US$42.50/bbl.

The Kiwi dollar starts today unchanged at just over 66.7 USc. Against the Australian dollar we are nearly +½c firmer at 93.9 AUc. Against the euro we have risen to 56.5 euro cents. And that means our TWI-5 is up at 69.9.

The bitcoin price is another +1.6% higher today than this time yesterday, now at US$13,052 in what is being described as a FOMO rally. 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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89 Comments

Speaking of houses. We went to tender this week on a Wellington house. BEO $965k. Offered $1.22 mil. Sold for more than $1.4 mil. Doubled in 4 years. More than 45% over the asking price.

An old friend who is an agent says things are getting tense at some open homes with too many people turning up for the half hour slot. She struggling to talk to people without others rudely pushing in. She says it can only be described as a frenzy especially with the cheaper houses and is worried she going to have the equivalent of toilet paper fights this weekend.

Yes, we've witnessed the same things. To the point were we stopped going. Couldn't even move in some of the open homes we went to. And it is tense. The frenzy is really becoming a bit concerning.

13
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The dream team of Jacinda Ardern and Graham Orr are doing an amazing job. Not sure the alternatives are any better, though. The institutional groupthink is just not fit for purpose.

Seems to be a worldwide phenomenon Roger, low interest rates seem to be the biggest issue and I don't see them getting any higher for quite some time (if ever)?

Yeah.
This doesn't feel right to me.
Can NZ keep doing ok economically given another big wave of covid has hit the northern hemisphere?
I mean, maybe we can. As others have said the lack of ability to travel international is putting more back into the domestic market.
Then we have all this cheap and plentiful credit.
Maybe we can be a little bubble of relative economic strength?

Are there any stats on net international tourism expenditures pre covid (international spend in nz minus nz spend overseas)?

Could search myself of course....

Spend into NZ 16 or 17 billion.

Taken out of NZ, I've seen figures ranging from 6 - 9 billion.

The BNZ economist was halving the gross impact to get net.

IMO given what’s going down globally provides the perfect opportunity for NZ to become a self sustaining nation - yes tourism etc have taken a hit as have those that support those industries. With no cruise ships and tourists crowding us out I feel we’ve got our country back

Inbound and outbound tourism in NZ is (almost) a zero-sum-game
The Outbound is driven by the Inbound
If we take account of the environmental costs it is definitely zero-sum
The disappearance of backpackers and campers is noticeable around here

Aye and it’s welcome to drive SI roads not infested with convoys of camper vans with drivers of dubious ability, making overtaking nowadays, for one thing, a heck of a lot less risky

Noticeably less soiled toilet paper adrift on the side of the roads.

Breaking news inflation is weaker than expected (whilst at the same time? is hidden in higher inflated value of land+houses).. so? it's a clear sign of RBNZ need to lower down further the OCR in order to stimulate the 'up' for inflation - Problem is? the govt & RBNZ already run as a predictable teams, their moves is easily readable, no surprises, no shock, no creativity, it's all following overseas herd mentality. Jacinda told clearly only 'one solution to the housing'.. it's just more supply, what she did not understand is: RBNZ, dejecting CAR, TD guarantee, DTI, LVR, QEs/LSAP to 100bill, FLP to 50bill, OCR close to zero, minus very likely now by Q1 2021, added for more QEs & FLPs - It's a Kiwi way to avoid hearing a terminally ill diagnostic, change the Docs if all of them saying the same? - stop listening then.. Business As Usual, until.... ?

Except that others have pointed out in this forum there is research that proves that dropping the OCR does NOT stimulate inflation, but raising it will.

18
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That, My Friend, is an example of EVERYTHING that the RBNZ and Government Policy have gotten totally wrong.

12
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Reminds me way back of growing up on the farm. When mother once let the lid off the pressure cooker, dinner on the ceiling.

And what have we got in the pressure cooker now? And with the RBNZ putting all its weight on the lid will the ceiling still be there after it blows?

“I think the Reserve Bank is failing at its job because it is essentially inflating an already very, very overvalued and very expensive housing market.

“They already have the tools to control how much money goes into housing and where that money goes. But they have chosen not to act by essentially opening the floodgates towards investors in particular.”

https://thespinoff.co.nz/business/22-10-2020/low-interest-rates-are-turn...

On the Contrary, we all must be kind & let's keep moving. Now support the majority of Lab govt & RBNZ moves. Think about it like this, you've a kid birthday party, your kid keeps on blowing/inflating the balloon, naturally it will either a pop? or the kid loose breathing/deflated, but enter you as parents (mom/rbnz, dad/govt) - let me get that balloon, then take turn to blow it up, to avoid popup or further deflating the air.
It's all exciting to parent, kid & some other closes friends, .. until? confidence waning, the rest of kids just decide to leave the party since no assurances to have a fun, no b'day cake, no other games/activities. All about keeping the balloon inflated & up in the air. That's all about it.

Confucius...

What part of Wellington? Asking for myself, as putting in an offer on a house in Welly late next week with a simlar BEO, and this is comment has made me think my offering will never get me a house...

Wadestown (Wilton Road).

Edit: And the estimates on Homes/One Roof/Trademe Insights we're all about 950-1mil.

Interesting. So it sold for 200K more than the topside Homes estimate?

The highest recommendation on Homes is $1.04 mil. So it sold for roughly 400k over that estimate.

It looks pretty tidy, with kitchen and bathroom done up since it last sold. But that is indeed a massive price for 110m2 house in that area.

Wow, i found it, that is a really tidy house, but also wow that price is insane. Actually finding these BEO 965 prices a bit misleading, as they are always looking for much high prices, and it just generates too much interest and sets false expectations. Would have thought $1.2 would have been enough!!! Nuts.

If you don't mind waiting 12-24 months to move in then a good option may be to buy a section now and build. You'll end up with a modern warm house that's similar/cheaper than that (nice) 100+ year old house.

Party time for people who are already on the ladder

Presumable they have to buy into the same market? Unless we're talking investors.

Agreed! I'm celebrating the fact that I don't have to bumble my way through crowds of people for a shot at home ownership.

15
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We’re really seeing the ‘fear’ in FOMO now. What a time to be alive.

"Here's our summary of key economic events overnight that affect New Zealand, with news rising house prices are becoming a signature global consequence of all the pandemic stimulus."

What is the pathway for this (madness)? Who is qualified to borrow, and who is lending?

Everyone - so long as you have a pulse...... (and even that may not be a mandatory requirement - I'm sure someone will be happy to lend to the dead).

Sorry to disagree BadRobot but our bank manager has been taking a fairly conservative approach to lending. And I have no problem with that. They have gone through our past accounts with fine tooth comb, not just income but also expenditure, checked rental return against market rates, requested decent deposit. All good business practice. Of course this all means we will probably have an interest rate around 2% but stress tested against 5-6%.
A number of commentators here have pronounced on the growing debt bomb however the auctions I attended were driven by cash buyers. I recently talked to a 82 year old and he had just bought a residential investment because his bank return was minimal, he paid cash.

15
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So what is the RBNZ saying?
They want 82-year-old New Zealanders risking some part, or all, of their life savings to speculate in the residential property casino because the returns on those same savings are non-existent, all in the name of Saving the Economy!!!?
Yes.
There is a valid argument for the progressive draw-down of savings capital in older age, but the RBNZ has 'lost it'; we've lost it if we've come to the state of forcing those savings out into the Economy for fear of not getting a good enough return on 'risk-free' savings.

And on from that. The loss of budgeted income is causing corner cutting. Less heating, reduced quality diet, less outings/socialising, less doctor visits all of which potentially means worse health and the cost of that, and dependency on an already stretched health systems. Would be interesting to learn what percentage rise there might be in retirees cancelling reducing health insurance cover.

The old fart was cashed up and probably dropped a mil cash on a house a FHB might have been trying to get into.

Oldies are set with universal allowance, free accommodation, free health care and all the other perks they get (gold card, heating allowance in winter etc...).

Personal choice. He could have lived off that cash comfortably but greed is part of most human's nature. No pity here if it goes tits up.

He deserves it - back in his time it was much harder in all things. FHB today are soft and need to harden up - its just the "free" market working.

The private banks are lending Scarfie. Who qualifies - anyone who wants to put their head through the noose I guess. What defines a sub-prime mortgage these days? Sure fire way to lose your shirt if inflation up ticks. The private banks will be creaming it, but the risks are skyrocketing too. Any up tick in inflation and delinquency will become the dominant theme. Government and central bank reluctance to do anything substantial about this issue will be the downfall of the current system. By the way DO NOT buy into derivative investment vehicles offered by banks. That'll be where they are offsetting their risks, while holding onto the securities.

A noose carefully disquised at a trough?

Noose in front of the trough

It will never uptick. If it goes up in price it is removed from the list.

15
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quote: I know what you're thinking: 'Did he fire six shots or only five?' Well, to tell you the truth, in all this excitement, I've kinda lost track myself. But being this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you've got to ask yourself one question: 'Do I feel lucky?

"Well, do ya, punk?”

Brilliant comment, just brilliant.

Harry Callaghan lives on!

I wonder if, when Clint Eastwood said those lines, whether he realised that he was delivering one of Hollywood's most enduring quotes?

Probably just thought -"Frankly my dear, I don't give a damn!"

Classic movie.. but also his latest The Mule could be a good analogy where Clint just prints unlimited money for little or no effort until..

About time! Some regulatory spine in the property market....."Lies, Deceit and Fraud"

"the High Court to last year order Chinese businessmen Zhong Liang Hong and Xueli Ke to sell the property.(they had bought without OIO Approval)...Christopher Tanner was then able to snap up the "majestic purpose-built lodge" for $3.25m in March last year. That was considerably below its $5.5m Auckland Council valuation...he has since operated it as a high end getaway...Yet just over one year later, the lodge was now back on the market (Covid19 will do that to you if no one comes to stay?!)"

But it looks like the original Chinese, non-approved owners tried to push it through some related party 'New Zealanders' before finally letting it go for $3.25m. That annoyed the OIO.So:

"The OIO then initiated an investigation against the businessmen that led to them being prosecuted in the High Court. The pair were subsequently ordered to pay $2.95m to the Crown as a fine"

Ah. It's Friday....
https://www.nzherald.co.nz/nz/luxury-lodge-bought-illegally-by-chinese-b...

How inscrutable
How to lose a cool $5 million
Bought for $5,500,000
Sold for $3,250,000
Fined $2,900,000

Unbelievable, even a cartel smuggling 100kgs meth into NZ would not be fined that much.

Yet they would be in jail for over 20 years..not so much for bankers? When was the last one convicted and locked up.................?

“One of the things that creativity psychologists have discovered is that if you put a lot of middle aged white men together and give them a creative problem to solve they will report afterwards what a profitable experience it was, how much they enjoyed it, how much they’d like to do it again in the future and it was all totally worth it, and they come up with fuck all.” Start about 15:00

“I’m waiting for the moment when a person in a white coat will say: ‘We scientists, now know, that we know less than we thought.” From 30mins for a general talk about science.

John Cleese at Google. ENTP personality for sure ( gets stuff ). https://www.youtube.com/watch?v=2-p44-9S4O0

Sounds like the National Party.

Now that's a brilliant comment

Housing price booming but unlike in USA in NZ house price were already high in bubble and have taking another leap from the peak.

13
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This is a global bubble, and all bubbles burst. The bigger the burstier.

Just where the floor is, and how hard the landing on it is, are the questions.

My take is that this one will be the Great Re-set; quite possible the end of fiat finance. And it was all quite predictable, if we had been measuring real measures. Hard to understand how a whole society can fall for a peddled belief, but there it goes.

No better start to the day than reading the Vampire Squid has been fined yet again.

If only they cared..rinse and repeat.

I am getting quoted cattle out of South Canterbury at favourable prices, apparently it's in a drought, these seasons are getting more interesting all the time.
My cattle have done well but are getting too heavy for the store market, i don't want to sell for another month, I may have to kill the heavy ones.

"I may have to kill the heavy ones" could you expand on that - were do they end up?

The buyers are wanting rising 18mth bulls at 300 kgs or less, the tops of ours are over 400 kgs already. They are putting on 1.5 kilos a day and I have enough feed for at least a month, if the forecast rain comes next week I will be set till the end of the year.

Buyers would rather grow the cattle than have someone else do it and make that money, also a lot of farmers would be replacing with calves but it looks like this year, thousand and thousands less have been reared, I don't know the numbers but it's significant.

It's always a bit of an unknown until the meatworks crank up and the cheques start turning up in mailboxes, thats shows my age, digit's on your bank balance more like it. Once you have the money in the bank you have more confidence to spend on replacements. At the moment the Works are dropping the schedule at .10c a kg a week, that makes us all nervous, until we know where the bottom is, thats around 32$ a week so in the last three weeks prices are back $100 a head, for all we know there could be another $100 to go or even more. I think it's $5.30 to $5.20 a kg dead weight at present, at one stage it was over $6. You have to work out if you weight gain is keeping ahead of schedule falls, also what to do with all the grass if you kill early.

These bigger bulls of mine will all be killed by next winter and if I can get them to 480 kgs by christmas which half should do they will probably end up on the hook late December or early January then head to the USA to add to the girth of some already overweight family via burger king, mind you don't blame the beef for what the carbs are doing.

.10 cents a kg for you, $21.99 a kg for Pac n Save.

that should be investigated, old dairy cows end up $18 a kg mince.

In his freezer and/or on our plates

I would rather chew on them, nice job there for such real productivity, surely we cannot chew the old RE villa brick or wood in Dunedin. The one that went gang buster pricey as similar to AKL RE pricing in 2014.

Listen to the silence
We hear from RE sales agents
We hear from the Macro-Economists who are members of "The Church of the Squiggly Line"
The opnion writers and talk-back radio
But
We are not hearing anything from Property Managers who have to rent out all these new investment properties
How's it going guys?
Getting your rents OK
What is the vacancy rate
How long are they vacant before getting a tenant
How many will be new ghosts

Auckland Central City 4 Star hotels.

Now being used for WINZ emergency family housing.

Yes, this!!

Are they rentals? Or is housing the new term deposit?

Amazing, my thin wedding ring that cost me a fifty is now over five hundy.

Am sick of the media parrotting what the primary industries say about well paying jobs. But when you read the articles, it's super vague indeed.
New Zealand is a small country, and we hear from our kids and others some different stories that are not good.
Media should give us some facts or shut up.

Wow those AU electricity spot price averages look great. $30 to $50 / MWh depending on state. $140 right now in NZ

NZ Wholesale power as at mid-day today $130 mw/h. Weather mild. Price known to go up to $600 mw/h
That's the difference where AU shifted into distributed solar as its Kyoto commitment
The Federal and State programs started in 2005
The vast bulk of their power generation was from coal which has to be dug up and transported at a cost
Main stream power generation is still from coal
Now 75% of all residential dwellings have roof-top-solar
It has taken them 15 years to achieve that

Absolutely right. They’ve made marvellous progress with low cost renewables. We are still puddling around on ~80% renewables just like we were in 1980.

Naturally we will call our de-industrialisation of Tiwai, Kawerau and Marsden a win and gloat we’ve reached 90% renewables, despite the fact thousands of skilled jobs will be lost.

The other thing they are doing is preparing the way for the hydrogen economy. H2 might be mostly hype but they are at least building the relationships with Japanese buyers and building the renewable infrastructure for H2 electrolysis. They are also planning to export electricity via Indonesia to Singapore. We are planning....?(crickets)

Is all this because people are expecting inflation? Seeking hedges of value, even at a premium?
Help me think this through.
-If we get deflation, the real cost of their mortgage debt will increase, with income unlikely to rise. Very unpleasant.
-If we get inflation, and the RNZB feels the need to reply with interest rate rises, the real cost of the debt also increases.
-If we get globally synchronised inflation, such that the RNZB doesn't need to raise rates to protect the currency, *everything else* becomes more expensive. So you can still service your mortgage but won't be able to afford food.
None of these suggest a 'new environment' where taking on huge debt is a good idea. What am I missing?

My suspicion is that when we eventually get inflation (which is what we WOULD get if we gave money to everyone, rather than just rich people who save it), they will let it run for a few years at a higher percentage, calling it "pent up inflation". Really it's the only way out, unless they come out with debt jubilees.

They have already said this Blobbles. Also, they have undershot for 10y straight so they can be very patient on the topside. If you are a house buyer it must feel like it's all stacked against you, and it is. I have said it several times, house price inflation is the only thing (well rates as well) balancing out widespread deflation in products like tv's and cars etc.

The risk of falling interest rates .....
Somone who "borrowed" $800,000 at 4% was paying $32,000 a year in interest
If they roll-over that mortgage for 2% their costs fall by 50%
Someone who borrows $1,000,000 today at 2% interest will pay $20,000 pa
If rates fall to 1½% as expected with Funding for Banks that will fall to $15,000 pa
A cost reduction of 25%
The important bit is the term of the mortgage
If you can get 1½% for 10 years well and good
If you can only get 1½% for 1 year not so good
The risk then becomes rising rates to the upside
It's a global issue not a local issue
If rates escallate back up to 4% the $15,000 on $1 mil goes to $40,000 pa
80% mortgage of $1 million property value is $1,250,000
The smart money will sell the minute they can get $1½ million or more
Right at the moment can't see interest rates going up any time soon

You still need to repay the capital. So for $800k repayment mortgage:
@4% = $3819
@2% = $2957 (23% less)
@1.5% = $2761 (7% less than 2% cost)

Alternatively, for the repayment to be the same at 2% as you were paying at 4%, you could buy something for $1.033m (29% more)

House bought in June 2020 for 1030000 again in market after 3 months with expectation of 1.2 million - When Bubble is at Peak, one notices such Churning :

http://www.trademe.co.nz/property/insights/address/Auckland/Pakuranga/Ud...

Check another that sold last year for 1.6 million and now expecting more than 2 million

http://www.trademe.co.nz/property/insights/address/Auckland/Half-Moon-Ba...

In NZ dealing in property is and should be the only business rather tha working day/ night in business.

Making $8000 to $9000 per week (not taking rent over the period) - excellent returns.

“Regarding Malaysia, the local Goldman Sachs subsidiary has plead guilty in US court proceedings to its part in the 1MDB fraud committed with the previous Prime Minister. It has agreed to pay US$2.8 bln in penalties. That now adds up to about US$5 bln in penalties “
.... It’s beyond belief that these banksters at Goldman Sachs & HSBC etc get a way with money laundering, manipulation of markets and all they get is a fine and not jail. There’s no justice for these low life criminals. It’s one rule for them another rule for everyone else.

How is that different to anyone in power in NZ and a property investor creating policy that pushes the housing market. How can they ever be objective. Jacindas argument that noone wants property prices to fall is just incorrect. Noone with property investments wants it to fall... Noone likes paying tax .. or going to the dentist.. but we do so because objectively it is the right thing to do. The argument that housing at a max of 5 times incomes is good for the economy because more money is free for other sectors of the economy is undeniable. BUT NOONE makes the argument or in an entire election campaign raises the question... It is better to process our wood locally and export finished product.. We dont do that because we dont invest in it because all the budget ... and the budgets for the next 20 years are going into propping up the property market.

Its just bubble psychology - everyone becomes collectively stupid for a while, then they become collectively 'woke' about the same time and realise how stupid one another were and try to blame everyone except themselves as the bubble deflates. Witnessed it first hand in USA when their property bubble burst.

I have a new strategy, take what I think will logically happen based on all the evidence, then do the exact opposite. The housing market in NZ makes no logical sense at all, that is why I just bought a house and it was final settlement today. All logic would point to a bubble popping, so therefore its not going to happen. Everything is upside down and inside out.

Central bankers are given a level of respect and even admiration suited only to their job title. As such, they travel the world as honored guests to fulfill the insatiable demand for their takes on essential matters no matter how far off the mark.

Only rarely is there occasion for useful information.

One of those was August 2014. Stanley Fischer who was then Vice Chairman of the Federal Reserve found himself in Sweden. Because his audience was Swedish and not American or even English-speaking perhaps he felt a freer hand at being honest. Whatever the reason he told them what he would never say here.

"Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back. Indeed, research done by my colleagues at the Federal Reserve comparing previous cases of severe recessions suggests that, even conditional on the depth and duration of the Great Recession and its association with a banking and financial crisis, the recoveries in the advanced economies have been well below average." Link

Our future?

Markets expect #ECB not only to increase the size of the PEPP envelope from €1.35tn to €2.0tn in Dec, but also to cut their deposit rate by the end of 2021. Forward rate implied by overnight indexed swap (OIS) rates has fallen from -0.55% on 7th Oct to -0.59% today. (via CE) Link

In a functional housing market, this extra demand would have no effect on house prices, but because we have a dysfunctional market it does.

Even without a Covid type event house prices were unaffordable, and all Covid has was to apply a multiplier effect either up or down, in response to tweaking by RB.

There is either understeer or oversteer, but no stable market.

In this regard, both National and Labour/Greens/NZ First are incompetent with regard to housing.