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US job openings and mortgage applications slip; Aussie sentiment rises; China gets deflation again; Japan's machinery orders jump; UST 10y at 0.95%; oil soft and gold drops; NZ$1 = 70.4 USc; TWI-5 = 72.5

US job openings and mortgage applications slip; Aussie sentiment rises; China gets deflation again; Japan's machinery orders jump; UST 10y at 0.95%; oil soft and gold drops; NZ$1 = 70.4 USc; TWI-5 = 72.5

Here's our summary of key economic events overnight that affect New Zealand, with news East Asia is back to normal in contrast to the US and Europe.

First, the number of job openings in the US edged down slightly in the first week of December, a sign of a softening labour market amid an upsurge in pandemic infections, and ebbing fiscal support for households.

And mortgage applications fell for a second straight week and essentially ending a long upward run. But they do remain quite elevated on a year-on-year basis.

In Australia, a Westpac-Melbourne Institute consumer sentiment survey has come in very positively, especially for expected future conditions. It is now 48% above the low in April and has reached its highest level since October 2010, marking a ten year high. Sentiment has fully recovered from their COVID recession.

Separately, China seems to have extended its ban on Aussie log imports, claiming a biosecurity risk.

In China, deflation is setting in harder now. They have had producer price deflation for a long time and in November it eased to -1.5% year-on-year. But now they also have consumer price deflation, and it bit quite hard in November. Analysts had expected the year-on-year inflation rate to fall to 0%, but in fact it fell to -0.5% and below zero for the first time since 2009. A year ago, their CPI was rising at +4.5%, so this has been a sharp turn down. This retreat is being driven by pork (-12%) and petrol prices (-18%). However, beef prices are up +4.2% and lamb prices up +2.2% above year-ago levels.

However, new loan growth in China in November was strong although it just matched analyst expectations.

But the bond woes roll on for some major companies. Their great tech chip-making hope, Tsinghua Unigroup, is now warning more bond payment misses are likely.

Japan is reporting a rather substantial improvement in their machinery orders for October. After a -4.4% monthly fall in September they were expecting a modest +3% rise in October, bringing the year-on-year result to -11%. But in fact orders poured in. They were up a huge +17% from September, meaning the October level is now almost +3% higher than the same month a year ago. That is a very substantial positive surprise. Export orders drove the gains.

Japanese machine-tool orders for November also reported a strong recovery and are now +8% higher than the same month in 2019.

After starting the day in positive territory, the S&P500 has now moved negative, reporting a -0.6% fall and growing in early afternoon trade. Tech stocks are falling even harder today. Overnight European markets closed mixed with Frankfurt up +0.5% and Paris down -0.3%. London was flat. Yesterday, the very large Tokyo market ended its session up a very strong +1.3%, Hong Kong was up +0.8%, while Shanghai was down -1.1%. The ASX200 closed out yesterday with a +0.6% gain while the NZX50 Capital Index closed with a +1.3% rise.

The latest global compilation of COVID-19 data is here. The global tally is 68,470,000 and a +667,000 rise in one day. At this rate, we will top 100 mln by the end of January. It is still very grim in Russia, the UK, Brazil, Turkey and Indonesia. It does seem to be easing further in Europe generally although not in the UK or Sweden. Global deaths reported now exceed 1,562,000 and up a very sobering +13,000 in a day as death rates spike everywhere.

And the first rollout of Pfizer's vaccine has identified issues for people with allergies and official warnings have been issued.

But the largest number of reported cases globally are still in the US, which rose a record +238,000 overnight to 15,627,000. The US remains the global epicenter of the virus. The number of active cases is surging and now at 6,237,000 and that level is up 134,000 in just one day, so many more new cases more than recoveries. The rise in 'active cases' by about +100,000 in one day has been normalised. Their death total now exceeds 294,000 and up +3000 in one day. The US now has a COVID death rate of 886/mln, and now higher than Argentina.

In Australia, they are not getting any resurgence. There have now been 27,993 COVID-19 cases reported, and that is just +6 more cases yesterday. Now 47 of their cases are 'active' (+3). Reported deaths are unchanged at 908.

The UST 10yr yield will start today firmer, now at just under 0.95% and a +4 bps rise. Their 2-10 rate curve is flatter at +76 bps, their 1-5 curve is also flatter at +28 bps, and their 3m-10 year curve is flatter too at +83 bps. The Australian Govt 10 year yield will start today back up +3 bps at 1.03%. The China Govt 10 year yield is +1 bp up at just on 3.31%, while the New Zealand Govt 10 year yield is down -1 bp at 0.93%.

The price of gold is lower today, falling -US$27 to US$1842/oz. For the first time this year, ETFs are divesting their gold holdings.

Oil prices are slightly softer at just under US$45.50/bbl in the US, while the international price is soft at just over US$48.50/bbl.

And the Kiwi dollar is little-changed again at 70.4 USc. But against the Australian dollar we have fallen by -½c, back down to 94.5 AUc. Against the euro we are unchanged at 58.3 euro cents. That means our TWI-5 is still at 72.5, a level it has been at for more than two weeks now.

The bitcoin price has fallen another -2.5% today and is now at US$18,383. 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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96 Comments

As a matter of interest my father refers to East Asia as the Far East. The expression stems from his Navy days.

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Aye, still was about when visited on business trips 70/80s. Throw out from the old BritishEmpire pre WW2 and the ex pat type society described in novels and/or short stories, Somerset Maugham etc. Japanese gave all of that quite a rude awakening didn’t they.

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We are in New Zealand, not in Europe.

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Yeah and we are further east!
'Far East' is a pretty archaic term.

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Indo-China?

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The mother country?

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Since we are on a globe, and the word "far" could mean anything, far East is fine. You just keep going around until you find the place you are talking about :-p

It's just like if a politician said to a central bank "avoid unnecessary instability", the definitions of "unnecessary" and "instability" are entirely subjective.

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How sensible that we have moved on from calling East Asia the 'Far East', bearing in mind that Indonesia, the Philippines, and Japan are north of Australia, which undoubtedly sees itself as part of 'the West'.
But thanks to the United States and Britain, we cling to the term 'Middle East' to describe Israel and its neighbours, which I have noticed Indian English-language media sensibly call West Asia.
All these terms — the West, and the Near East, Middle East, and Far East, hark back to the days of Imperial Britain. It's time we in the South Pacific called places for where they are, instead of where they appear through a London telescope.
As for how the Near East turned into the Middle East:
https://www.washingtonpost.com/news/worldviews/wp/2016/05/19/the-modern…

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Far East, Middle East. Common use.

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Does "South Asia mean India / Pakistan? Referring often to where people come from?

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India / Pakistan is north Asia

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India, Pakistan etc. - South Asia; Vietnam, Thailand, Malaysia, Singapore etc. - South-East Asia; Mongolia, Greater China region, Japan, Koreas, Guam etc. - North-East Asia; The stans (Tajikistan, Afganistan etc.) - Central Asia; Saudi Arabia, UAE, Syria, Iraq etc. - West Asia. Geographically, Israel is also part of West Asia.

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In modern parlance, everything east of Siam and north of the Dutch East Indies.

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In China, deflation is setting in harder now. They have had producer price deflation for a long time and in November it eased to -1.5% year-on-year. But now they also have consumer price deflation, and it bit quite hard in November. Analysts had expected the year-on-year inflation rate to fall to 0%, but in fact it fell to -0.5% and below zero for the first time since 2009.

In the West we have this nonsense again :
Inflation Hysteria #2 (TIPS, Swaps)
Inflation Hysteria #2 (Nominal UST)

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Rate cut may be on its way from PBC.

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Low interest rates aren’t a central bank providing accommodation, they are instead its worst nightmare being shoved right back in their face. Well, our worst nightmare because for one thing despite repeated failures, rates that never rise testifying to that failure, central bankers are never held to account. Link

The China Govt 10 year yield is +1 bp up at just on 3.31%, while the New Zealand Govt 10 year yield is down -1 bp at 0.93%

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Loving whats under the tree this year.

1. Property rights;
https://www.newshub.co.nz/home/rural/2020/12/new-report-estimates-83-pc…
because no one has been breaking the law, where is the compensation for whats being taken away?

2. Rule of law replaced by Radical Love! - from last night
https://mobile.twitter.com/RMarchNZ/status/1336213230599880704
When the rules are made for the wealthy elite it’s an act of radical love for our communities to be gay, do crime.
Today I pay tribute to everyone who has had to lie to WINZ or the immigration to survive in my maiden speech

3. Words & language - I hate what you say.
https://www.rnz.co.nz/article/8960d83a-6b63-44c0-855d-8d008804a555
Jacinda Ardern promises to close 'gaps in hate speech legislation'
And the debunk
https://www.stitcher.com/show/the-victor-davis-hanson-podcast/episode/e…
- places where its proved not to work - hint everywhere its tried.

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Heard on RNZ the case of Israel Folau to illustrate the hate speech carry on . He would be a criminal for expressing views against LGBTQRJQWQWF and the moral heroes are criminals for expressing views against him for his religion.

She's a slippery slope.

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the Christchurch anniversary speeches & hate speech legislation are back to what Jacinda does best .... the nice fuzzies achieving next to squat
away from nasty stuff like house prices

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And the media lap it up!!

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They gave him a gun license with the only person he could verfiy his sanity was a online gamer who new him for 10 days...

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Yep the Police mess up, no one held accountable and firearms owners penalised. The last inspection i had the arms officer was so old he had a driver and his sole effort was to sit and talk about the old days in the Police!

Twitcinda needs to wake up to the fact that firearms offending is not undertaken by the people she is currently making ownership so much harder for.

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Grim warnings: Young will pay the bill for Covid and soaring house prices
https://www.newsroom.co.nz/grim-warnings-intergenerational-debt-legacy?…

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Don't worry, we're also making sure future generations can't work out the numbers on our huge debt bills and soaring house prices.

https://www.rnz.co.nz/news/national/432451/nz-students-record-worst-res…

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I know a few teachers, they swear kids are getting dumber - and they approaching retirement now having taught for around 45 years!

I guess are they getting dumber or are we failing then some how? The teachers see more kids with attention disorders, more kids with very unstable home situations, more poverty...it doesn’t look to be trending in a good direction

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Don’t know my grand children are well ahead of where I was at around twelve. But, before you say it, that might well be an indictment on me. Recall a cartoon in the old Punch magazine 1980s or so, teacher has 10 calculators and says to the class if I take four away how many calculators will I have left. There is inattention to basics and too much whizz around kids now such as texting for instance, and that will destroy eventually our language as we know it.

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Yes I think technology has a lot to answer for in terms of kids and attention span - but at the same time it has helped create the likes of Elon Musk (although he read a lot of books as well as playing computer games).

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I am in my late 20s and have still noticed kids of school age are falling behind.
Tech is slowly biting away at the attention span and patience required to solve maths problems or read a book on a difficult scientific subject.

I admit kids are a lot more aware these days but that's because the internet is feeding them bucket loads of info my age group didn't have access to more than a decade ago. Whether they are critically analysing and evaluating the information or simply consuming it for the dopamine rush is a separate question altogether.

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Likely because in the 80's, under Lange we dumbed down the education system on the principle that no child should fail. Hasn't changed since.

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I finished high school in 2019, currently taking a gap year. I saw dozens of kids who literally DID NOT KNOW HOW TO READ pass Level 3 and go to uni. NCEA is a complete joke.

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Yip one of the teachers I talked to said she has kids who are 17/18, think they're off to uni next year, but can barely read.

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Past...

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It doesn't help that half the time the kids are being taught sex ed (which means sexual identity and emotions, not even practical contraceptive information) and when they're not learning about unisex rainbow nonbinary identities they are being counselled over the traumas of covid. My son was fed up over all this and just wanted to "actually learn something" (he's 12)

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#rentcontrolnow

Our politicians need to think deeply about increasing benefits simply to pay for the market failure of housing in this country. Regulation of the rental market is the only sustainable, long term action . We cannot afford to increase welfare transfers to match the runaway inflation in the cost of accommodation.

We have to accept that asset inflation is a direct result of the global QE initiatives and to counter that we need to regulate the rental market accordingly.

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Isn't it bizarre Kate that the thing that causes the issues you raise, is the thing the central bank is doing on purpose and is apparently doing so to prevent things from getting worse, but at the same time making the issues you raise worse.

Strange (stupid?) world we live in (and if only we could all be so ignorant as to just follow my 'mandate' and ignore the bigger picture - I'm trying to imagine any job where I told my boss I was just following my mandate while sinking the company and claiming it wasn't my fault - but perhaps as a society we are that petty now).

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it boils down to a shrinking pie to divvy up (in real terms)
cant please everyone
Debt is being manipulated to (temporarily) do so
but push somewhere, it just bulges out somewhere else

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Or does H&E? To IO above - could it be hidden agendas, personal or otherwise? Where does the power lie? Orr seems concerned about bank resilience yet at the end of 2019 we were told they had been stress tested and could withstand a 50% drop in house prices. So the lack of transparency is raising a huge question of why has he changed his tune to this degree?

And another point, another poster has pointed out Friedman's comment on the interest rate fallacy, that is lower interest rates driving stimulation being a false premise. So as a trained economist I assume Orr knows this, so why does he persist in driving rates lower? Is there an agenda to capture as many of the population as possible in unsustainable debt, perhaps to the point of being able to impose some form of servitude, or mass obedience? Control by stealth? I am loathe to provide fodder for conspiracy theorists, but i cannot understand why the ongoing persistence?

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Because we have to follow the Fed lead - that's why. If the US has the world reserve currency, you have to play by their rules (unless we have another war and somebody writes new rules for how the financial system works).

Imagine if this year Orr simply said - fuck it - this economic theory is crap. I'm not dropping rates because its going to cause house prices to explode and make our problems worse.

If he did that, NZD might have parity with USD (https://www.investopedia.com/terms/i/interestrateparity.asp) - our export sector would get decimated. So that isn't an option.

Perhaps the only thing he did 'wrong' in my view, is dropping the LVR's. That I thought was very unwise/stupid. But he obviously looked at the forecasting and it was saying, unless we keep expanding our debt/lending, our economy is going to a very dark place - so was desperate to keep money circulating in anyway possible. As I've said previously - I think central banks are pushing themselves further and further into a very dark corner and their only option is to continue to double down on failing policies, because its too late now to change tack without causing massive damage/pain to someone (and our culture now is to avoid any pain and look for short term pleasure) - and if that happens, it usually results in revolt or war (see history). So its a fine balance he's trying to maintain. But what a shit time to take over the job - honestly.

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"might have parity with the USD"? Not a certainty though. Plus I suggest that other things also drive the value of the NZD so parity is by no means a certain outcome. The USD remains the reserve currency, so if Orr pumped the OCR by 0.5 or even 1% it wouldn't have that much effect. A couple of years ago our OCR was a couple above the US's and it didn't have that much impact then, so why would it now?

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Because of the rate at which the US just devalued their currency.

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That devaluation was the expression of the world's trust in the currency and the US economy rather than a deliberate action by the Fed to devalue it, so again why would Orr pumping the OCR be a problem?

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murray86... good luck trying to GUESS where currency rates are going. It is almost pure bingo.

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Not trying to Karl. Just trying to get my head around what's happening now and why. I really appreciate the responses from everyone though as they enable me to ask questions for the bits I don't understand or doubt.

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Well Muz, Dr Cullen himself has recently come out to say as much. Something like by the time the OFC had got to 2% any stimulation produced by the cuts was spent. And he pointed out too, that there are plenty of other countries to observe, who have already experienced that to prove the point.

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To me rent controls seem like putting a bandage over a nasty infected wound.

Rent prices would come down soon enough if there were plenty of houses. Keep the border shut and keep building at the current rate and it will happen soon enough, and if construction slows down the government could take up any slack for state housing.

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Makes you wonder how many people's rentals would go under if yields drop as a result of falling rents. Then you're back to the problem that Orr raises - if house prices fall, we're looking at severe recession/depression. Shit sandwich all round.

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Only those people who invested more recently in buy-to-let properties would need to sell. And for every rental listed on the market - you can check when that property was last purchased via this website;

https://homes.co.nz/

My very anecdotal look at things in the area I live in, suggests (probably) less than 20% of rentals were purchased within the last 5 years. Hence, (roughly) 80% of them would not need to sell in the event that rent price controls were to make renting affordable (i.e., in the 30% of household income range for the locality they are in).

The point I would make about this is that changing my anecdotal evidence to solid factual evidence only needs the government to access and collate all this publicly available information. Stats could write the collation program inside a couple of hours to prove or disprove what I'm saying.

Here's the latest rental to come onto the market in the my area;
https://www.trademe.co.nz/a/property/residential/rent/wellington/lower-…

It was last purchased in 2014;
https://homes.co.nz/address/lower-hutt/petone/5-1-waione-street/v2rxr

According to my formula of RV/1000 = weekly rent maxima, the weekly maximum rental for the property would be $415/week - yet the owner presently wants $530/week.

There would still be plenty of yield in that $415/week... provided of course, the owner didn't draw down on unrealised capital gains in order to leverage up their portfolio. And if they did, well that would then require a reduction in debt for the portfolio as a whole.

EVERYONE WINS.

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I.O... I think very few people would go under if rents dropped. Most landlords have decent equity in their own home and could easily withstand even a long period of negative equity. Personally my rentals were (slightly) negatively geared for a number of years and I regularly took a 3 month rent holiday (was a limit of one 3 month holiday every two years) when funds were required. With good equity I understand that now you can also change to an interest only mortgage for a year or two.

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Agree.

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That is beyond mad.

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Yes definitely seeing it in the Wairarapa. Our Core Logic valuation is double what we paid for the property a little over 3 years ago. An identical property to ours 2 blocks away (with one less bedroom than ours) sold for nearly 2.5x our purchase price. Riding the wave.

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I keep getting fed information on the US Election dispute from US contacts, and a kiwi friend that is following it closely. What probably isn't making the mainstream airwaves is that the SCOTUS has agreed to hear the case brought about by Texas. Other states have now joined Texas as Plaintiffs.

Core of the case seems to be that a lawful vote is something that can be determined and that lawful votes can't be diluted by those that are unlawful. Lawful being determined by the US Constititution in this claim.

The case goes on to outline what it believes the constitution says is a lawful vote. Mail in voting is where the challenge mostly lies. It seems the only situation in which the constitition permits a mail in vote is for an absentee voter.

It will be interesting to see how the arguments are made. Time to get past the wild stories and get to the relevant evidence.

My friend stated, the SCOTUS must hear the case as it can't have a state going rogue on it, for whatever reason. Hearing a case is something quite different to ruling in favour, but there must be a prima facie case for it to decide to hear.

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The thing is that to try and invalidate a vote after you have lost the election on a point of law is dubious. Those who cast their ballot by mail at the time believed that it was valid means of casting a vote. I doubt the court would disenfranchise millions of people on a point of law which is in effect what they would be doing.

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If there is an uproar at present about Biden supposedly winning fraudulently then it will shrink to the size of a tea party squabble compared to what will erupt if the election result as it stands is overturned by any means, by any court. The USA might well thus explode and implode.

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It is dubious - but certainly not more so than changing election rules ( for mail ballot verification specifically .. ) while the election was already in progress , as several states have done.

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Were they changed or clarified ? I know of that some ballots had to be kept separate but that is a clarification.

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..if you want to try and follow! Not sure if I can.

These injuries, Texas asserts, demand a remedy. But the remedy sought is not what some may surmise is the goal—a second term for President Trump.

.... what Texas seeks is for the Supreme Court to mandate that the defendant states comply with the Constitution, and that means that electors are selected by the states’ legislatures. Texas makes this point clear, stressing: “Plaintiff State does not ask this Court to decide who won the election; they only ask that the Court enjoin the clear violations of the Electors Clause of the Constitution.”

https://thefederalist.com/2020/12/09/6-things-to-know-about-texass-supr…

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I bailed out of bulls, while down south, my children loaded them so we only have the heavy cattle left, which there was no market for. I don't know where we are going but it doesn't look pretty.
From one of my fertiliser suppliers yesterday.

"Pricing Update

Effective today we have increased our DAP price to $712/tonne. This comes as a result of significantly increased shipping costs ex Asia. Shipping rates out of Asia to NZ are currently up by 400%-500% which is adding approximately 100 NZD/tonne to the landed product price. While we have been able to move some of our DAP demand away from the Asian market we are still currently reliant on this market for a portion of our volume hence the small price increase. "

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..time to develop those Chatham Island phosphate reserves perhaps (don't tell pdk) ?

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Holy shit thats going to hurt! Exactly what farmers dont need this year.

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Andrewj - At least two beef processors I know of are living hand to mouth as they are either running out of chiller space and/or struggling to get containers.
I expect a short term hit to our schedule and the store market. Add an exchange rate above US 70c and we have gone dry ( we didn't get this week's expected rain ).
If you blinked you would have missed spring up here. But the cattle are looking good and plenty of silage being made.

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Cyclone coming your way and probably just the first. Green in Canterbury, but winds are knocking us around, STH Otago is really dry talking to locals,one hay contractor has only done 200 bales so far this season.

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Probably us. Got first cut done 2 weeks ago. Only got 205 bales. Next door being done now

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Hi Aj, welcome to the friendly south-as you can see we have made a fair amount of silage/balage & are just getting our winter crops in (take note Mr Parker)but things are starting to dry out slowly a la la nina probably.I have a summer crop of turnips in to counteract the effects of what will be a green drought for us(green grass but little growth)We are all encouraged to get an increase in advance of payout from Fonterra,but I worry the increase has come from from increased demand from China- who could turn the tap off just as quickly if provoked too often.Enjoy your road trip around Southland .Regards

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I heard a report on Country TV that a lot of refrigerated containers are stuck on ships that are sitting in Auckland Harbour waiting to be unloaded, and as you say there's almost no chiller space. Lucky there's plenty of grass around.

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Andrewj - At least two beef processors I know of are living hand to mouth - Wagu beef for dinner then?

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A decent Angus or Hereford steak will suffice.

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Hi Andrew, yes indeed, shipping costs major problem and some of that is due to Brexit mess. Most commentators clueless on impacts of this.

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Really love all the the talk straight from the horses mouth. Keep up the commentary guys :)

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Seconded and thirded.

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All the worlds problems will be solved with the Great Reset which NZs PM is eagerly following:
https://time.com/collection/great-reset/5900748/klaus-schwab-capitalism/

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Is she?
In words maybe, hardly in action.

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"In words maybe, hardly in action."

Jacinda in a nutshell.

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Yes, stakeholder capitalism amounts to: be nice and report on how nice you are on a voluntary, internally-concocted and unaudited basis, of course.

So classically neoliberal - even though he decries neoliberalism.

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Kate, whats your definition of neoliberal, classic or otherwise?

Klaus is left of centre, progressive, globalist. (Big reason Europe is in the swamp it is). More a Bond Villian if you like...
https://www.interest.co.nz/opinion/107567/klaus-schwab-thinks-now-time-…

For balancing your measure best try reference to VDH.
https://www.stitcher.com/show/the-victor-davis-hanson-podcast/episode/e…

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Neoliberalism is the deregulation of markets and industry. His idea of a reset avoids (at all costs) any mention of regulating the private sector/markets/industry in order to improve global social justice and wellbeing. He's promoting a voluntary approach - i.e., be nice corporates and self-regulate yourself.

It's what Federated Farmers promoted for 20 years here with respect to the voluntary Clean Streams Accords. Meanwhile, of course, the biophysical state of our freshwater resources continued to degrade.

Yes, he's a globalist - and globalism and the deregulation of markets is the status quo.

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It seems Klaus is just not left enough for you.

His activities & frameworks advocated are the same, voluntary or arbitrary. You seem prefer all things arbitrary.

Farmers slice of clean streams a success, runoff less now than then.

Yep, Klaus he's a globalist

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The dichotomy you were looking for is voluntary (non-statutory, unenforceable) or regulatory (statutory and enforceable). I don't know where arbitrary comes into it, but I dislike arbitrary as businesses need certainty. Regulation provides certainty, like it or not, of course.

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If anyone is interested about the state of international shipping from an Oceania perspective, I was in a seminar by Maersk helping explain why our shipping rates from China are 3-4x our contracted rates + we are facing regular delays of over a month getting tins here.

Perfect shit storm culminating in the worst shipping environment seen in 40+ years.

Key Points:

- Surge in global container demand due to increase of consumption goods – due to low travel and more consumption - (particularly Oceania due to faster recovery, Government economic stimulation, subsidies etc)
- Higher demand fluctuations in US (Q3 year on year +14%)
- Industrial action in Sydney + other ports leading to port omission -> dropping containers at alternative ports and transporting to locations -> stressing supply chains, container logistics and container availability. Productivity still lower at some of these ports leading to delays. Potential for more industrial action
- Trade imbalance. In Oceania- YoY Q3 import up 4.6%, export down 6%. Excess empty containers sitting in AU especially, aren’t loading with exports and making it back to China. Due to lacking port productivity - Empties sit in Australia, ships have to go back to China with ~30-50% less export containers than normal . Will continue to be a challenge.
- Adverse weather, including high winds and heat waves that have slowed shipping and port operations’ productivity
- Auckland ports delays up to 14 days, expected to get worse up to 17 days delays. Labour shortage.. 3/8 cranes working due to short-staff. Expected to continue until end of Q2 @ Auckland. Tauranga is becoming congested as a result of alleviating. Going to port Marsden Point is now becoming an option however transit costs to Auckland are high.
- Normally after Chinese New Year would see a relief of demand however will be strong through next year.
- All lines and ships are delayed. Shipping companies are constantly chopping and changing routes, omitting ports, slipping etc to avoid congesting delays.

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= inflation?

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Indeed - currently in meeting around price rises.

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Thanks for that. I've been looking at getting some bits out of china and the quoted shipping rates are insane.

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Thanks, this has come up fast on farming at a time of year when options are limited due to meat work capacity.

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Gee, another indication that globalisation is falling apart at the seams.

And yet, no Western governments are putting in any plans/strategies for a new paradigm of greater self-sufficiency going forward.

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Indeed, nuclear-powered freight and coastal shipping would be just the carbon-zero ticket.....

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Who said anything about self-sufficiency having any relationship to carbon-zero?

I mean self-sufficient by way of on-shore infrastructure/manufacturing capacity and capability to reduce our reliance on imported manufactured goods, i.e., insulin for example, do we manufacturer it locally? Then there are nails, screws, chainsaws and chains, car windshield wipers, lighters/matches... anything common and essential and most likely currently imported from China.

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Thanks loveyourwork for the update - as a farmer I just get told the consequences not the reasons. Using Northport should be a last resort, temporary at best - road to Auckland is narrow, windy with minimal passing lanes. Roading authorities are being proactive and supportive but shows the vulnerability of our Northland roading infrastructure that 12 extra trucks an hour (current container ship in port) requires planning and inconvenience.

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40ft HC Containers typically landed in Wellington for around the ~$2k mark from the Gold Cost, now receiving prices of $4 - $5k.

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Yep - yesterday I got a quote for 1 x pallet, 360kg from Melbourne, $800. A 20ft would normally cost about $1k.

40ft + 40HC have shortages all over the show - we've had to use 20s to get some stock on the water.

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12 - 18 months ago you could Airfreight a pallet that heavy from Melbourne for $1000.

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"Half the world rising" eh?

60% of world GDP is USA and EU, both of which, if we take a look, are up SHIT CREEK at moment, economically.
That is pre Brexit which is paying hell with freight costs due to stuff being blocked at ports. USA economy still in second decline. Also all economies still (apart from lying China) making up for hole fell into in mid 2020. But apart from that and HUGE debts out of control and no prospect of repaying, it is all fine. I know NZ has no CV19 and houses prices rising, but sorry, things in world economy are v far from good and are about to get v hairy. Bond defaults in China not a bit fo a clue???

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yes
if we (the world) arent burning stuff, then jobs & supply lines begin to look very shakey
and house prices will be the least of our worries

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and we will start to see more and more "stress" placed on producers
costs going up, prices going down
an ugly squeeze

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