Dairy prices up again; US retail sales rise; CBO likes what it sees; China housing froth returns; EU struggles; RBA extends big QE; UST 10yr at 1.10%; oil up and gold down; NZ$1 = 71.5 USc; TWI-5 = 73.5

"It expects their economy to grow 'above potential' for the next few years"

How many $ of debt to a $ of GDP?

https://seekingalpha.com/article/4308227-powells-fantasy-economy-should…

What can the EU do? EC President Ursula von der Leyen has made several errors in dealing with Covid-19 that have compounded one another and refuses to stand stand up and be accountable or stand down from her position, along with those in charge of the vaccine program. Her presidency has become the best advertisement for Brexit as the British surge ahead.

The independent Congressional Budget Office has issued an upbeat assessment of American economic prospects for the next ten years. It expects their economy to grow 'above potential' for the next few years, making back its pandemic losses by as early as next year. It also expects inflation to pick up, along with interest rates, and debt servicing will become a larger burden for them.
Bonds prices have a long way to fall to price this outlook.

At the present time, however, the cracks which had papered over the post 2008 bodge and the distribution of national income was increasingly tilted away from the 99% to the 1%. Such a polarization of wealth and income cannot possibly endure without economic and political chaos. The process is in its early stages and represents the most severe trial of the new order since the 1971 establishment. In effect democracy is being sacrificed by the requirements of capitalism. This Great Reset is the Hayekian wonderland of a 21st century slave state.

‘’If capitalism of the consolidation state can no longer produce even the illusion of equitable growth, the time will come when the paths of capitalism and democracy must part. The likeliest outcome would be the completion of a Hayekian social dictatorship in which the capitalist market economy was protected from democratic correction. Its legitimacy would depend upon whether those who once were its citizens would have learned to equate market justice with social justice and to think of themselves as members of a unified marktvolk. Its stability would further require instruments for the ideological marginalization, political disorganization, and physical restraint of anyone unwilling to accept this lesson.
Link

Undoubtedly Barfoots will keep the foot down, when it provides its January data today , maintaining the recent overwhelming prices always and only go up story . I am sure , unlike Gamestop et al , there are few groups shorting or manipulating the Kiwi quarter acre.
Interestingly the iron ore price has given back another 10 percent in the past week , perhaps Mr Kerr's AUD/NZD forecast is being manipulated .

In Australia, the RBA didn't change the interest rate at its review late yesterday, but it did dramatically extend its QE program.

This policy intervention revolves around Open Market Operations (OMO) whose ultimate end (not aim) is its own balance sheet remainder: bank reserves. We are all taught that it is the OMO which determines money market rates, all because of that whole printing press thing we are further taught to presume spits out digital bank reserves.

Given this, it was a huge problem for Ben Bernanke’s group of officials twelve and thirteen years ago when money market rates were quite clearly being determined by anything else besides the Federal Reserve’s OMOs. You can read more about it here – and I urge you to do so in order to understand why the policy response had been so fatally flawed so as to more clearly appreciate what really must have happened; suffice to summarize, Bernanke’s crew believed they had created a situation where, during the worst global monetary panic since the Great Depression, there were “abundant reserves.”

Straight away you have to ask, what good are reserves if they are abundant and the whole world melts down anyway? According to the doctrine, you aren’t supposed to ask that question.

Therefore, the episode teaches us two very important lessons. First, there’s obviously much more to the financial picture than bank reserves. The Fed talks about liquidity in regard to them, but they must be small issue to the wider world otherwise 2008 wouldn’t have happened at least beyond October.

There’s simply no way to reconcile a monetary panic with this absurd idea of too much money or liquidity. The level of bank reserves just doesn’t correlate to anything outside the immediate arena of bank reserves. Link

5m vaccinations per day aren't going to cut it, we need that multiplied x4 if we are going to give everyone in the world their first dose in a year. Currently it's going to take 4 years to vaccinate everyone in the world. But remember, most vaccines need a booster, so we are talking 8 years including the booster. Or 4 years if we want to hit 50% vaccinated where we should start seeing decent results. That's a lot of time for new mutations, so we have a long way to go yet.

This is why they are scarce and life saving medicines and why NZ should not be out front buying more. Luckily we are part of COVAX. Australia promising to vaccinate everyone in 2021 is dire, it will mean a whole lot of people in other jurisdictions die if they go outside the COVAX program and buy their own, depriving places that really need it.

I am afraid David that you risk being lumped in with rest of gloom merchant MSM.
You state that USA recoveries are exceeding new cases but do not state that new cases per day have been falling for weeks now. They were (in USA) over 300,000 per day. Now it is 146,000. A drop of over 50%. So tings are improving rapidly. Yes, with the new variant things may well get a lot worse soon, but that is not the current trend. Worldometer shows that worldwide infections per day have also been falling, by 28% comparing the last 14 days with previous 14 days. Yes things are getting worse in EU. And, experts told us all last year that 3rd world would be far worse than developed world. But it is not. Because people in 3rd world mostly do not live near airports, or travel on planes and half at least of their pop do not live in cities, where spread is fastest and chances of getting it are far higher . Most people in these countries live out in sticks with plenty of fresh air. Laurie Garrett said all this in her v informative book in 1994, called The Coming Plague. Media experts do not like to admit it but they were wrong. 3rd world is doing much better than developed world. Hence their not getting the vaccine at same time will NOT be this heinous humanity error that WHO keeps whining about either.

By the way, NZ GDP fell each year (2017-18-19-20)
Are we really expecting it to be higher in 2021? Compared to which year?
By fell, I mean It was lower than prev year, not in absolute terms

Some interesting research into the real enemies of WSB...
https://youtu.be/cAhOMOhFcY8

by bw | 1st Feb 21, 8:46am

"It is looking quite ominous for the opening this week on Wall Street. On Friday, the S&P500 fell -1.9% and the S&P500 futures suggest it will fall another -2.2% when it opens tomorrow."

Some people do talk shite...

Looks like the inevitable GME fallout has begun in earnest.

"The number of active cases fell overnight and is now just on 9,835,000 and -85,000 less in one day, so more recoveries than new infections. And there are now more vaccinated people than active cases in the US"

Given how much exposure has been published on the bad Covid news over the last year, should the above statement not be the one and only headline, printed in capital and bold ?

Pandemic refers only to how many countries have cases, not the death toll, or infection rate.
USA has by example had 446,000 deaths due to Cv19 infection.
Pop is 330m.
Infections are about 26m: so about 8% of their pop has been infected thus far.
Deaths as a % of infection = 1.7%
Deaths as a % of pop = 0.00135%

Not exactly "raging" as media like to phrase it.
USA, by contrast, in October 1918 (yes in one month) had over 100,000 dead.
And pop in 1918 of USA was 103 million. 675,000 died. Or 0.0065%
The current epidemic has of course not finished, but the 1918 death rate was 4.85 times higher.

March 2009 low for DJIA was around 7600.
So it has quite a bit to go before any "correction" or crash will be suitable as an expression for its downward moves. it only went down to 23,000 in March 2020.
A meteor would be needed, in form of collapse of USD, to impact it at present.
When margin debt stops rising, then we will have some interest.