Breakfast briefing: US labour market stutters

US jobless claims stay high; US life expectancy falls; China lightens liquidity; iron ore prices rise; reflation trade spreads; Aussie jobless rate falls; UST 10yr at 1.28%; oil up and gold down; NZ$1 = 72 USc; TWI-5 = 73.5

19th Feb 21, 7:26am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news the US labour market is struggling to regain some momentum.

US jobless claims were actually little-changed from the previous week, although on the more usually-reported seasonally adjusted basis they were up and the prior week was revised higher. There are now 4.9 mln people on these benefits, a fall of almost -100,000 but mainly because qualification periods expired. In addition, more than +500,000 people applied for the Pandemic Unemployment Assistance benefit last week. There is likely to be another burst of applications from the storm-hit states this coming week.

The next regional factory survey, this one from the Philly Fed, is positive reporting good new order levels, but also rising input prices.

New residential construction data is staying quite elevated in the US, with new housing starts high and a surge in building permits granted to an all-time record high. This pipeline is building.

American household debt climbed to US$14.6 tln at the end of 2020 in the latest update, 71.4% of it in mortgages compared to 70.3% at the end of 2019. (New Zealand is 95% on this same basis.) US household debt is now at 67.8% of US GDP. (New Zealand is at 97.0% on the same basis.)

And American life expectancy retreated by a full year in the first half of 2020, the biggest drop since World War II, down to 77.8 years from 78.8 in 2019. (The equivalent New Zealand level is 82.0 years.)

The latest January reading of Canadian jobs growth for January reports a sharp loss, and much more than expected.

In China, their central bank is letting liquidity tighten sharply. They let ¥280 bln of reverse repo agreements expire yesterday but only added ¥20 bln in new ones. That involves a tightening of NZ$55 bln overnight, and the markets noticed.

And resumption of iron ore trading in China has seen prices rise from already high levels.

Hong Kong reported employment data overnight, in this case for December, and they lost jobs too, down -17,100 when a small rise was expected. Their jobless rate ticked up to 7.0%.

The Indonesian central bank cut its official interest rate by -25 bps to 3.50% in an expected change. They downgraded their 2021 growth forecast to under +5% and eased lending rules. However they also said this rate cut may be the last for a while there.

The latest update of EU consumer sentiment is very unencouraging for them, languishing at a dismal level.

The OECD released its Q4 economic growth comparisons for its G7 and it was Japan that topped this list of major developed countries. The EU is really struggling but there was growth elsewhere.

German bond yields hit a new eight-month high after a hefty sell-off earlier in the week driven by expectations of rising inflation, and the relentless progress of the reflation trade. Worldwide, there is increasing nervousness about what this trend will mean. Don't forget the global bond markets are more than twice as large as equity markets.

The Australian unemployment rate has fallen to 6.4% and a two year low (from 6.6%), surprising economists and leaving their labour market just shy of its pre-COVID-19 level. (The New Zealand jobless rate is 4.9%.)

New York equity markets are lower with the S&P500 down -0.9% in early afternoon trade. Overnight European markets were generally lower by -0.5% but London fell -1.4%. Yesterday, Hong Kong posted a -1.6% fall and wiping out all of Wednesday's rise. Tokyo was down another -0.2%. Shanghai was back open after their week-long holiday and gained +0.6% in conviction-less trading. The ASX200 was little-changed yesterday while the NZX50 Capital Index was down -0.3%.

The latest global compilation of COVID-19 data is here. The global tally is still rising at a little-changed pace, now at 110,065,000 and up +406,000 in one day. But the pandemic seems to be easing in some notable places in the first world. Global deaths reported now exceed 2,434,000 and +11,000 since yesterday.

More countries (97) have started their vaccination programs. About 188.5 mln doses have been given so far (+10.4 in the past three days). There is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.

The largest number of reported cases globally are still in the US, which rose +73,000 over the past day for their tally to reach 28,459,000. The US remains the global epicentre of the virus although there is clearly some easing. The number of active cases fell sharply overnight and is now just on 9,357,000 and -47,000 fewer overnight, so less new infections again than recoveries. Their death total is not falling however and is up at 503,000 (+3000) in one day. The US now has a COVID death rate of 1513/mln, and that compares to the disastrous UK level (1753) where deaths are also still rising (119,000 and +1000) but a bit more slowly now their vaccinations are rolling out.

In Australia, their community control remains impressive. Their all-time cases reported is now 28,912 and only +1 more case overnight, zero new cases in the community and the rest new arrivals and all in managed isolation. 41 of these cases are 'active' (-1). Reported deaths are unchanged at 909.

The UST 10yr yield is up +1 bp at 1.29% today. And their 2-10 rate curve is marginally steeper at 118 bps, their 1-5 curve is little-changed at +49 bps, while their 3m-10 year curve is steeper at +126 bps. The Australian Govt 10 year yield is unchanged at 1.40%. The China Govt 10 year yield is still up +5 bps at 3.31%, while the New Zealand Govt 10 year yield is down -3 bps at just under 1.50%.

The price of gold will start today little-changed, but down a minor -US$2 at US$1776/oz.

Oil prices are up about +US$0.50 and are now at just over US$61/bbl in the US, while the international price is just under US$63.50/bbl.

And the Kiwi dollar opens a little firmer than at this time yesterday, back at 72 USc. Against the Australian dollar we are firmer at 93 AUc. Against the euro we are at 59.7 euro cents and little-changed. That means our TWI-5 is up at just over 73.5.

The bitcoin price is now at US$51,954 and +1.1% higher than this time yesterday. In between it reached US$52,622 as a new record high. At no time in the past 24 hours did it fall below US$50,000. Volatility was a relatively low +/- 1.6%. The bitcoin rate is charted in the exchange rate set below.

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122 Comments

by Catdog | 19th Feb 21, 7:27am 1613672846

Never before has there been a better time to have a national discussion on Optimal NZ population.
Achieving the vision set out in the Climate Change Commission Advice Report will be easier with a population of 5 million rather that the 2050 6.15 million assumed. (See first comment in yesterday’s 90 seconds at 9).
The choice of population is about to be very real. The size of population will have a large impact on the changes we will need to make. More people mean the 2050 targets will be harder to for each individual. Previously we have been torn between the benefits and costs of increasing population. The balance is about to tip with the costs becoming very real.
There were many good and thoughtful comments yesterday. One was that discussion on population size is a no-go area politically. (Don’t the politicians work for us?)
So what can us in the cheap seats do?
Firstly ask the Climate Change Commission to show us the scenario of holding the population of Aotearoa at 5 million. Ask loudly and persistently.
Secondly, given it is a political no-go topic, let’s have a referendum. Does anyone know anything about referendums and whether this type of question is appropriate? In the meantime lets have our own.
There is this post and two more. It might get a bit messy so to keep the questions together, how about only commenting on the last question. Thumbs up to the preferred option below please.

by murray86 | 19th Feb 21, 8:02am 1613674935

One of the surprises on this topic as that as I commented yesterday the powers that be studiously avoid talking about population size, but i am surprised that Maori interests do not push it under treaty related discussions. Excessive population growth due to immigration (current policy, not covering historical) makes it much harder for Maori interests to be achieved as it increases competitive pressures. While I am not supportive of some of the ways the Treaty is used in NZ, as they drive separatist and racist policy initiatives, it can be used to genuinely benefit Maori long term, and all of NZ as a whole by genuinely visionary leaders.

by Kauri | 19th Feb 21, 8:56am 1613678216

When asked (via surveys) the vast majority of Maori would prefer much lower levels of immigration.

by karl seastrand | 19th Feb 21, 11:01am 1613685712

And they should. Maori are disproportionately disadvantaged by mass ( mainly unskilled, poor migrants) migration mainly though fewer job opportunities, wages being kept low and extortionate rents all being heavily impacted by our immigration settings.
Probably the most most disgraceful thing I saw last year was the Ngai Tahu owned jet boating in Queenstown employing 4 out of 5 non NZers. The only skilled staff member (the boat driver) was the only kiwi. We need to offer good enough wages and conditions for these jobs so that NZers will do them.
There will always be excuses why businesses cannot get Kiwi staff but if we simply take away the easy option (of foreign slave labour) by strictly legislating on which genuinely specialized jobs can be done by foreigners then these companies will find a way to attract staff (as they did in the 1970s). People will mostly choose the easy option when given a choice. Why give these businesses a choice when it hurts NZ so much?

by Lapun | 19th Feb 21, 9:28am 1613680086

See http://www.thesocialcontract.com/artman2/publish/tsc0402/article_316.sh… for Ranginui Walker's argument from 30 years ago.
""The present generation of Maori leaders abide by the agreement of their ancestors to allow immigration into New Zealand from the countries nominated in the preamble of the treaty, namely Europe, Australia and the United Kingdom. But, for any variation of that agreement to be validated, they expect the Government to consult them as the descendants of the Crown's treaty partner. The Human Rights Commission endorsed that position with its recommendation to government that the Treaty of Waitangi should be considered in any decisions on immigration policy.""

by Lapun | 19th Feb 21, 9:55am 1613681745

and ""New Zealand's contemporary immigration policy is driven by the new and different partnership between corporate business interests and government in the political economy. Desperate for a quick fix to rising unemployment and a stagnant economy, governments of both the left and right were readily persuaded that a pro-active immigration policy would create jobs and stimulate growth in the economy. Particularly influential was the Business Roundtable with its capacity to hire mediocre academics to write seemingly authoritative reports on the benefits of immigration to feed into government policy. ""

by Kate | 19th Feb 21, 10:20am 1613683235

Such a wonderful article. I think it could be very beneficial to frame the population discussion around Te Tiriti intent/obligations - or as Ranginui Walker describes it, "the social contract".

by murray86 | 19th Feb 21, 8:08am 1613675310

I suggest a population size of 4 million or less is about the ideal balance.

But it also poses a question; the last i heard there was an estimate of a little over 1 million Kiwis living overseas. Currently as COVID debates have suggested all of these have an undisputed right to return at any time. so does an agreed population size refer to those living here, or of those who have the right to call themselves Kiwi? Potentially a complex conversation, but aspects of this will need to be clearly understood for many reasons.

by Yvil | 19th Feb 21, 10:17am 1613683055

NZ is severely underpopulated, Italy has a similar land mass to NZ and over 50 million population, so IMO about 50 million people is right for NZ,

by Fritz | 19th Feb 21, 10:39am 1613684396

You don't think our small population is a nice thing Yvil? I think most people would disagree.
But that's your opinion, so fair enough.

by Yvil | 19th Feb 21, 11:15am 1613686509

Of course most will disagree but thanks for respecting my opinion

by Fritz | 19th Feb 21, 11:42am 1613688176

Out of interest, why?
Isn't our small population a comparative advantage?
Obviously it has downsides too.

by Yvil | 19th Feb 21, 2:43pm 1613699012

Fritz, see my reply below at 2:42 :-)

by youngdumbandbroke | 19th Feb 21, 10:47am 1613684858

Ah, yes, Italy. The world leader in productivity and fiscal prudence

by karl seastrand | 19th Feb 21, 11:10am 1613686230

Yvil....Italy is one of the better examples of the way immigration can destroy the whole fabric of society. Go ask an Italian what they think of what has happened in their country regarding immigration? Last time I was at Milan train station I felt I needed a weapon to protect my family.

by Fritz | 19th Feb 21, 12:49pm 1613692189

I felt the same about Paris.

by karl seastrand | 19th Feb 21, 6:30pm 1613712641

Milan, Rome, Paris, Brussels, Amsterdam, Munich, London, Bradford. You can take your pick.

by karl seastrand | 19th Feb 21, 11:11am 1613686313

Think we have to allow anyone with residency and citizenship to return. Just change the settings from now.

by Yvil | 19th Feb 21, 11:17am 1613686661

Murray, it's not easy preventing NZ's population to increase but you can very easily help decreasing NZ's population to the 4 Mill you wish, just leave NZ !

by murray86 | 19th Feb 21, 12:39pm 1613691595

Uncalled for Yvil, and not the point of this debate. The debate is about sustainable population size for ecological, including climate reasons. And people leaving doesn't solve the problem, just moves it somewhere else, which still impacts NZ.

To make the suggestion you have is disingenuous, and unnecessarily personal. What is your solution to protecting the environment and climate? Do you we can do it with a population of 50 mil as Italy does? How? Auckland ran out of water years ago and now imports it from the Waikato. What would you do? If all the productive farm land is converted to housing, because people don't want to live on hills, where would our food come from, and how would the country trade with the rest of the world? Or is your think too shallow to have considered these impacts?

by Fritz | 19th Feb 21, 12:51pm 1613692265

Genuinely interested in why you would like NZ's population to be 50 million, Yvil

by Yvil | 19th Feb 21, 2:42pm 1613698933

OK 50 million was a number to stirr the pot but I certainly don't mind a larger population than presently. Of course low population presents some advantages and infrastructure needs to keep up with growing population but I find most smaller towns in NZ are full of backward thinking, narrow minded people. There is simply not enough variety to provide a rich fulfilling life but I guess residents of small towns don't know otherwise so they're fine with it.

by Yvil | 19th Feb 21, 2:57pm 1613699830

I like vibrant cities that are exciting with a great cultural mix. Cities that host major events like concerts, sports, cities that are alive with top restaurants, a great nightlife.
I like people that are well travelled and worldly, open-minded, forward thinking, enthusiastic

by Fritz | 19th Feb 21, 3:10pm 1613700615

I agree with all of that!
But, if you like that, why do you live in NZ?
My answer is that I have family here, and I find Auckland cosmopolitan enough (only just...).
Why not Australia for you Yvil? You seem to have plenty of wealth, and Sydney and Melbourne are very cosmopolitan places.

Btw I find most of the 'cities' in Nz full of backward minded people! Auckland, and up to a point Wellington, the only ones that don't.

by Dale Smith | 19th Feb 21, 3:18pm 1613701087

'I find most of the 'cities' in Nz full of backward minded people! Auckland, and up to a point Wellington, the only ones that don't.'

Do you want to expand on that Fritz?

by Fritz | 19th Feb 21, 3:25pm 1613701533

In my experience I find people in regional cities pretty conservative, dull and narrow minded. Tauranga, Hamilton, Christchurch, Palmerston North etc.
That's just my opinion. And there are exceptions.

by Dale Smith | 19th Feb 21, 3:40pm 1613702438

Yes, I think it is pretty obvious it is just an opinion, but 2/3rds of NZ is what you describe?

by Fritz | 19th Feb 21, 3:55pm 1613703305

Sure.
I lived in Christchurch for 2 years in the late 90s, boring, dull, conservative. All most people wanted to talk about was rugby, or which school you went to. If you were from Auckland or England, like me and some colleagues, heaven forbid- you were then the source of much ribbing, some of it quite dark as well as light hearted.
And if you are East Asian, like my wife, expect a lot of indirect racism and some direct racism.
I'm sticking with my opinion.
Presumably you live in a regional centre Dale?

by Yvil | 19th Feb 21, 5:14pm 1613708087

Hmmm I just learned we have something in common Fritz, our spouses are both of south asian ethnicities. She's also the answer to why I ended up in NZ as she arrived here when she was 9, later on I met her in San Francisco when doing my OE...

by Dale Smith | 19th Feb 21, 6:26pm 1613712372

I have lived in a number of overseas and NZ towns and cities, including 15 years in Auckland. Never been to a boring place, and dickheads are universal but few.

by karl seastrand | 19th Feb 21, 6:34pm 1613712872

Me too. But I wouldn't choose to live in "vibrant cities" such as Manilla, Mumbai or Joberg.

by Dale Smith | 19th Feb 21, 3:30pm 1613701813

There are no boring places, only boring people.

Some people need to be entertained. Or as that famous Gladiator Maximus Decimus Meridius said after killing his opponents, "Are you not entertained?"

That's why Circus's come to town or increasing Bread and Circuses from our politicians.

by nz-it-worker | 19th Feb 21, 1:42pm 1613695370

If people were serious about reducing the rate of population growth, now is probably the best time ever to take action.
A population wide refusal to get the Covid 19 vaccine would force the governments hand, making it very difficult to open the border again. Can't see it happening though.

by Catdog | 19th Feb 21, 7:27am 1613672863

I would like the 2050 NZ population to be held to the current population of 5 million.

by Wuhan ER | 19th Feb 21, 9:07am 1613678828

Certainly don't let anymore Xingmowangs in.

by Lapun | 19th Feb 21, 9:32am 1613680375

I disagree - we need a few more diverse opinions like his. Not 40,000 per year but about a dozen immigrants chosen for their unique thought processes. Xingmowang is one of my favourite commentators - he makes me think why I disagree with him. I'm glad he has a thick skin and keeps contributing.

by kiwichas | 19th Feb 21, 10:28am 1613683721

I think X is really letting us know what the norms (not facts) in China are; things that most of us would regard as unacceptable or untrue are gospel there.

by lowercase capitalist | 19th Feb 21, 11:13am 1613686434

I agree. I disagree with most of what Xingmowang posts but having different perspectives is what stops places like interest from turning into an echo chamber. I just wish that they would engage with responses to their comments more - mostly they seem to just drop a one line, controversial remark but never respond further than that.

by Fritz | 19th Feb 21, 1:06pm 1613693198

Hmmmm. I don't quite agree. He just parrots the CCP line so we know what he's going to say anyway.
I also find his lack of response to follow up questions annoying.
I would really like to know why he doesn't live in China if he thinks our way of governance and way of life is so beneath China and the CCP's.
It makes me think he's some kind of CCP troll, or he doesn't have the skills and/or personality to return to China to establish himself successfully there.
Another theory is he is an international student.

by PandaMonium | 19th Feb 21, 1:35pm 1613694943

Lapun, I hate to break it to you but Xingmowang is a troll. He is most likely middle aged white guy writing from his mom's basement (or garage if he comes from rich family).

by Fritz | 19th Feb 21, 1:42pm 1613695367

That's another theory.
Or a troll sponsored by the USA or another anti-Chinese entity.

by Lapun | 19th Feb 21, 2:22pm 1613697739

Why do you assume male?

by Fritz | 19th Feb 21, 2:24pm 1613697856

Could be female sure. Or a bot.
I can't be bothered writing 'he or she' every time.
I could say X.

by KH | 19th Feb 21, 2:05pm 1613696736

I have always assumed Xing was sitting in a chinese government post centre with 5,000 fellows.
Will be required to make thousands of posts each day worldwide giving out chinese government policy.
Lots of the posts will be semi automated and the sheer volume requires no extended discussion.

by Fritz | 19th Feb 21, 2:25pm 1613697955

Good theory.
Sheer volume requiring no extended discussion is a good theory for why X doesn't respond.
It might also support the troll theory - plant the provocative bomb, then run.

by Catdog | 19th Feb 21, 7:27am 1613672879

I would like the 2050 NZ population to be 6.16 million as assumed in the Climate Commission Advice Report.

by frazz | 19th Feb 21, 7:45am 1613673922

I will be 80 + in 2050...living on the beach in Hamilton on my super..yer right

by blobbles | 19th Feb 21, 7:49am 1613674157

Wow you flip flopped in the same minute!

by Zachary Smith | 19th Feb 21, 7:54am 1613674477

Blobbles...

Actually I thought the same as you at first I tend to read comments from the bottom up.

by Catdog | 19th Feb 21, 7:54am 1613674440

And no I'm not a politician! Choose one of the two. Read the last bit of the first post. Its a referendum.

by KH | 19th Feb 21, 7:51am 1613674293

Catdog. I voted the 5 million as you only gave us the two options.
But really the place would be better with Two Million.

by Catdog | 19th Feb 21, 7:55am 1613674525

Yeah. But I gave you twice as many choices as the Climate Commission.

by GV 27 | 19th Feb 21, 7:55am 1613674557

Which three million people are you proposing we execute? Random chance, meat-pack style sports club raffle or based on odd/even birthdays?

by KH | 19th Feb 21, 7:59am 1613674791

GV27. LOL. That's a comment out of the Ark. Keep up.

by GV 27 | 19th Feb 21, 8:05am 1613675111

KH - Bob Jones' solution to the government trying to reduce car use by 10% during the carless days era was to simply shoot every tenth motorist.

It's still my favourite piece of reductio ad absurdum, but it is becoming very useful for highlighting the differences between what a government says (something is a crisis, an emergency etc) and what they do (usually SFA outside of writing a few reports that move around lots of desks in Wellington).

You'll have to forgive my cynicism, I've been waiting for about six months at a tram stop on Dominion Road and I'm starting to think it's not going to show up any time soon. My children have had me declared legally dead and my wife has moved onto the local realtor for comfort. But I was told there would be a tram. I'm sure I'll get to work shortly. Surely our leaders wouldn't say one thing or promise something during an election campaign and then fall over themselves to not do it? Of course not. The media wouldn't stand for it.

by murray86 | 19th Feb 21, 8:13am 1613675612

Considering Bob Jones, GV, there would be moments when he would argue his suggestion was not absurd, but a realistic and genuine solution to a pressing issue. Also he would likely have been willing to wield the gun! Considering his expressed view of humanity, I'm pretty sure he'd run out of ammo long before he'd run out of candidates! Just as well the Government did the gun buy back.

by muzled | 19th Feb 21, 10:53am 1613685190

Unless of course he just happened to be the 10th car and then all hell would break loose saying how ridiculous it was that he couldn't do what he wanted, when he wanted and where he wanted.

by Kate | 19th Feb 21, 10:23am 1613683425

LOL. Good on you.

by Lapun | 19th Feb 21, 9:53am 1613681584

No need to execute 3m - just combine a rational immigration policy (just well paid experts as per other countries) with ever rising house price and rental costs with the financial penalties for having children. Half the population will move to Australia.
Just googled these numbers: 170,000 Maori live in Australia and 770,000 live in New Zealand. Find out why one in five Maori chose to live in Australia and encourage it for non-Maori Kiwis.

by karl seastrand | 19th Feb 21, 11:15am 1613686507

GV.. worry about the stuff we can control ie immigration settings.

by GV 27 | 19th Feb 21, 8:00am 1613674817

So how would population control in a country that has added 20% of its population in the last 20 years going to pan out? Are Kiwis who were born here suddenly not going to be able to raise families or face reproductive controls?

by Zachary Smith | 19th Feb 21, 8:04am 1613675078

NZ natural population growth rate is -0.69% which means it will decline quite rapidly over the years.

by GV 27 | 19th Feb 21, 8:08am 1613675324

NZ's natural population growth rate is being hugely undermined by the cost of living and accommodation, which has the additional effect of driving many overseas. So either we are locking those things in or we are saying that people are choosing not to have children organically - when the question should be 'would more Kiwis like to have bigger families if housing and living costs weren't so huge in this country?'. People I encounter very rarely seem to wish they'd had one less. Frankly, I don't see how you can discuss any population policy until you know whether are breeding less because they're dud roots or because of social consequences we'd rather not acknowledge.

by Dale Smith | 19th Feb 21, 8:55am 1613678141

The evidence to date says that as a country becomes wealthier then birth rates decline. Whether it's the money directly that causes this is up for debate.

For example, it could be wealthier countries are also better educated (sex education), more equal opportunities (more women choosing careers), and of course, can more afford birth control, and you are not dependant on having x number of children to support you in old age.

by Chris-M | 19th Feb 21, 11:38am 1613687930

There could be a bit of positive feedback in that also.
Static or reducing population means that the country in the wider sense has to borrow and pay for a whole lot less of increasing infrastructure and more of the workforce can be directed away from construction areas into export and wealth producing activities. It is notable that many of the countries in the world that enjoy the best standard of living have static or reducing populations. You have to ask why some governments and vested interest are always pushing for more immigrants. It certainly has nothing to do with improving the welfare of the population or environment.

by gingerninja | 19th Feb 21, 11:42am 1613688158

How can you not know why governments encourage immigration?

State pensions are a pyramid scheme, they rely on continued input from the bottom. Immigration is particularly significant now because the boomer generation (huge generation) have just started retiring and have all been promised state pensions, that have to funded by younger people. Having a large older population is also hugely deflationary because retired people aren't "productive" (in the sense of GDP per capita) and they just don't spend all that much money compared to younger adults (even when they have it), they also don't take on debt, and as we know, debt makes the financial system go round! Problem is, the younger generations aren't big enough and many of them go overseas, so the government needs to import migrants to pay taxes because there aren't enough younger people to balance out these issues.

Migrants paying taxes having generally not costed in education and childhood healthcare, so that's a bonus for government balance sheets and many migrants often go home, so they have paid taxes but won't all then draw pensions. And for the ones that do stay, they might have children themselves and contribute to upholding the pension pyramid.

Older people are more represented as voters, so it's political toxic to ever speak about how unfair any of this is, or how screwed the pension situation is, so they all pay lip service to reducing immigration whilst doing their best to keep the older voters happy (and not threaten their pensions).

However,most millennials and zoomers realise they probably won't get anything like the pension and retirement opportunities that they are currently paying for, and this contributes to the generational antagonism.

by gingerninja | 19th Feb 21, 11:45am 1613688312

Chris-M, how can you not know why governments encourage immigration?

by Fritz | 19th Feb 21, 10:47am 1613684862

You raise a good point. If NZ remains a super expensive country, and even worsens, how many people will want to come here and how many will leave?
Being super expensive hasn't stopped many migrants coming here in the last 10 years. I assume many or most migrants do their homework. They probably still come because although it is very expensive here, the overall standard of living is much better than where they have come from (India, China, Phillipines, South Africa). And they will tolerate the cost of living for the wider benefits.
I suspect the drop away in immigration from the UK is to a large extent due to our soaring house prices and the exchange rate. I would be interested in Gingerninja's view on that.

by Fritz | 19th Feb 21, 2:28pm 1613698104

On cost of living- our neighbours are lovely Indian people. They own the property. They have two other Indian couples living with them, presumably paying rent and making the mortgage more affordable for them.

by keithwoodford | 19th Feb 21, 10:50am 1613685001

Zachary
In the year to September 2020 according to the Stats Dept "there were 57,753 live births and 32,670 deaths were registered in New Zealand, resulting in a natural increase (live births minus deaths) of 25,083".
It will be many years, even with zero immigration, before New Zealands 'natural population growth rate' will be negative
.

by Zachary Smith | 19th Feb 21, 12:46pm 1613691964

Thanks Keith. Yes my figure is wrong. Currently the birth rate per woman is 1.71 which will eventually see a decline in population as it needs to be above 2.

by KH | 19th Feb 21, 8:16am 1613675769

GV. Stop scaremongering. Without immigration New Zealands natural population is drifting down already. Took us 70 years to get from 2 to 5 million. It's already heading in the right direction and theres no rush.

by GV 27 | 19th Feb 21, 8:21am 1613676096

Again, are Kiwis reproducing less because they want to have bigger families but can't, or because they actually want to have fewer families.

Or is this the bit where we pretend the housing crisis is a good thing and governments are expertly helping us fulfill our climate obligations, and that we have always been at war with Eurasia?

by Plutocracy | 19th Feb 21, 8:33am 1613676803

I don't think everyone these days wants a larger family. Anyone with half a brain can see the future is not going to be too rosy. Globally, we're already grossly over-populated, New Zealand thankfully was one of the last colonized land masses so has avoided this pitfall (for now) through luck.

by GV 27 | 19th Feb 21, 8:45am 1613677526

Exactly, although I would say we are vastly over-populated for our infrastructure, or at least what governments are willing to spend on it. Globally coming to New Zealand is very attractive. While not everyone wants to have a larger family, it would be useful to understand to what extent Kiwis who do are being constrained. There is a rapidly converging set of stats (Home ownership rates vs. women's age when they have their first child vs. the NZ wage gap) that we could be looking at the consequences of and attributing to 'People don't want kids' when the reality for many might be 'if we hadn't made such a mess of the place and added 1m people in 20 years, people might be in a position to have more if they wanted to'.

From this, all things should flow - like migration settings, infrastructure, even monetary policy. The mistake we have made is that we have not considered it at all in recent times and added more people than we can support - and over time, NZ is going to become more and more attractive to people who don't already live here, even if the people who do are going backwards like they are now.

by blobbles | 19th Feb 21, 10:51am 1613685079

Well as someone that doesn't want kids now, but used to, it's personally all about planetary future. While I believe we will make it through, it's going to be very tough for anyone born in the last 10 years IMO. IMO we will get a combination of climate/resource depletion issues happening at the same time which will destabalise enough of the world to cause a mass human and environmental tragedy. We are just lucky these things are happening as reasonably isolated events at the moment, but as they become more common, they are more likely to trigger a "perfect storm" set of events.

Adding another human as a consumer and resource depleter IMO is folly. They will not only add to the problem, but be forced to make some hard decisions later, which may betray my traditional moral base. I would far prefer for me to take that hit as an older person, rather than have someone I love being forced to make those decisions. At the same time, I am open to adoption or similar, once I am able to live in a house securely (maybe this time next year and I am mid 40's, which is not that unusual now).

I suspect for the majority of the population, the "secure housing" bit is the reason why birth rates are so low. I know it is in the people immediately around me, lots of 25-40yo professional women, for instance, who are still renting, cannot buy, refuse to even think about kids until they have secure housing, so will likely never have kids. There are also others I know in rented accommodation with lots of kids, but have to move often which puts huge amounts of stress on everyone involved. Those kids are not growing up in a balanced environment, that may be good or bad (able to handle changes in personal circumstances, though potentially not having the mental toughness for it).

So yeah, it's more like "we have made a big mess of the place" with not addressing climate change/resource depletion/infrastructure, rather than anything else.

by Fritz | 19th Feb 21, 9:31am 1613680299

When did things ever look rosy? There's always been doom and gloom as long as humans have walked the planet.
Think about the nuclear armageddon that hung over the world from 1950 to 1989.

by karl seastrand | 19th Feb 21, 11:28am 1613687325

And if new NZers want to live with their parents or siblings we should not stand in their way but they can do it in their country of birth. So often now one permanent residency granted snowballs to about 6 within a few years.

by SimonRo | 19th Feb 21, 9:13am 1613679236

I'm concerned that in 30 years time we are looking at 6.5 million or so.

by KH | 19th Feb 21, 7:56am 1613674613

There seems to be a plunge in Covid infections worldwide. Interestingly before significant numbers of vaccinations.??

by donny11 | 19th Feb 21, 8:19am 1613675989

Herd immunity. Infections/deaths peak when 40% of a population has been infected. By 60% you are on the tail end of the curve. Mind you in saying that it will be a long tail that goes on for decades. Google South Dekota Covid19 to see a classic bell shaped pandemic curve, this state implemented no restictions whatsoever to mitigate the spread of the virus so was one of the first places to achieve herd immunity. I think we are seeing this achievement of herd immunity on a more global scale the worst of the Covid19 pandemic should be over by May for most of the world. Vaccines will certainly be playing a minor part also. The only real kicker will be the new variants though IMHO there should be enough cross immunuity to take the steam out of this.

by KH | 19th Feb 21, 8:26am 1613676401

Useful comment donny11. Thankyou.

by profile | 19th Feb 21, 9:09am 1613678957

PCR cycle threshold was dropped by WHO the day when Biden came in to office. Lower the cycle threshold and you lower the number of "positive" cases. But that is just a conspiracy theory.

"This number of amplification cycles needed to find the virus, called the cycle threshold, is never included in the results sent to doctors and coronavirus patients, although it could tell them how infectious the patients are.

In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus, a review by The Times found."
https://www.nytimes.com/2020/08/29/health/coronavirus-testing.html?fbcl…
https://thecoloradoherald.com/2021/who-lowers-pcr-cycle-count-causing-l…

by profile | 19th Feb 21, 9:20am 1613679637

"The main test used to diagnose coronavirus is so sensitive it could be picking up fragments of dead virus from old infections, scientists say.

Most people are infectious only for about a week, but could test positive weeks afterwards.

Researchers say this could be leading to an over-estimate of the current scale of the pandemic.

...This is a problem we have known about since the start - and once again illustrates why data on Covid is far from perfect.
https://www.bbc.com/news/amp/health-54000629

by rastus1 | 19th Feb 21, 9:20am 1613679601

Based on herd immunity theory NZ must be highly vulnerable. We would have none.

by rastus1 | 19th Feb 21, 9:20am 1613679602

Based on herd immunity theory NZ must be highly vulnerable. We would have none.

by printer8 | 19th Feb 21, 9:29am 1613680183

Donny
Any reference for your comments including herd immunity being reached at 40%.
Infections seem to have well and truly peaked in US prior to roll out and effective influence of vaccine - however current infection rate in US is still less than 9%, well below your figure of 40% for herd immunity. Germany infections peaked just before Christmas but infection rate still under 3%.
Note that Christmas was only mid-Winter with second half of winter to come in both US and Germany so peaking seemingly not related to seasonal. Note extreme cold conditions currently in US.
https://www.worldometers.info/coronavirus/

by donny11 | 19th Feb 21, 10:11am 1613682693

You are wrong. You are confusing the CFR with the IFR. Even in the early days the better studies pointed to an IFR of .3-.4%. Read the study attached which is one of the better ones & by the way was done by someone who is incredibly pro lockdown, pro masks, pro isolating etc.
https://www.nature.com/articles/d41586-020-03284-3

Further I did not state that herd immunity is achieved at 40%. I stated this is when most places seam to be hitting the peak in terms of cases/deaths. So when the virus is at its worst. Herd immunity seams to start to really kick in at 60-70%. Ultimately where this is, is hard to know as it depends on assumptions on IFR which could be anywhere from .25%-.40% in developed counties.

Look at South Dakota officially they have 111,000 cases. There population is 884,000. Their total deaths are 1844. Look at their curve it has flattened. How has this happened? They don't have any restrictions what so ever. So virus mitigation strategies isn't the answer to the curve flattening. I'll tell you what happened, most people got the virus & herd immunity kicked in. If 1844 have died & the IFR is .35%, then probably 1844/.35 = 526,000 or 60% of the population have had the virus (526,000/884000 = .6). Vaccinations will also be helping however these only really got going in Jan well past when they hit there peak. So no South Dekota did not hit herd immunity via vaccinations, although these will play an important part for reducing case numbers/deaths moving forward.

Give up on the fear porn & do some maths buddy. Also learn the difference between CFR an IFR. You should know this by now. The pandemic has been going on a year.

by printer8 | 19th Feb 21, 11:06am 1613686018

Donny
Cheers

by The Person | 19th Feb 21, 11:27am 1613687264

Herd immunity without vaccination? How will we reach herd immunity when the virus is mutating so?

by Fritz | 19th Feb 21, 8:21am 1613676114

Past mid winter

by Squishy | 19th Feb 21, 8:29am 1613676595

I'd go with seasonal impact. Also, even if you don't have the kerbs on people's freedoms many will individually choose to do the right things.

The EU is falling a way behind the UK and US on vaccinations now. Apparently they are sitting in warehouses unused: https://www.bloomberg.com/news/articles/2021-02-17/astrazeneca-s-covid-…

by gingerninja | 19th Feb 21, 11:53am 1613688822

There will be a seasonal impact but also a behavioural one. After summer, the virus fell back and people weren't as committed to bevahiours that reduced infection rates, then as infection rates soared, many countries implemented stricter protocols or lockdown and obviously this eventually flattened the curve like it did last year and for a time period, people re-committed to more diligent behaviours.

There is always a limit to how long you can expect people to apply restrictions and depends on how motivated they are. It's like dieting, people can only give stuff up for so long before they slip back.

by printer8 | 19th Feb 21, 8:46am 1613677619

KH
Pandemics seem to have a finite cycle but we are not seeing too much about this in the press.
For example the "Spanish" influenza pandemic that struck New Zealand in 1918 with a death toll of 9,000 (population 1 million) lasted only between October and December . . . . disappearing naturally in less than three months.
This didn't seem to a result of herd immunity. However it is thought that throughout the later part of the nineteenth century there had been a number of lesser pandemics that had come and gone - this meant older people had established an immunity and but younger people without immunity suffering most casualties.
Of course we have had other numerous global pandemics in recent years the most significant being the "Asian Flu" H2N2 in 1957-58 (1 to 4 million deaths) and the "Hong Kong Flu" H3N2 (also 1 to 4 million deaths) as well as numerous less lethal viruses in the past 10 to 20 years. Both no longer significant despite herd immunity not being a factor.

New Zealand information is based on "Black November - The 1918 Influence Epidemic in NZ" by Professor Geoffrey Rice (Otago University) published 1988 which is considered an authoritative account. Information on global pandemics can be easily referenced in Wikipedia.

by interestreader | 19th Feb 21, 9:16am 1613679367

The plague lasted for 300 years

by karl seastrand | 19th Feb 21, 11:32am 1613687558

KH... many countries have vaccinated many of the most likely spreaders. Hope you are not preaching from the Billy Te Kahika books of hymns? He is almost funnier than Billy T James.

by KH | 19th Feb 21, 2:07pm 1613696829

@karl. Now that was a stinging comment. As for "Billy" Never.
I just asked a valid question about something observed. And there has been an informative discussion on herds and peaks an stuff.

by karl seastrand | 19th Feb 21, 6:39pm 1613713186

KH... sorry, I thought you were implying the whole thing was a hoax. I have talked to a few that think so but should have given you more credit.

by Fritz | 19th Feb 21, 8:20am 1613676001

Great post Catdog.
With a binary choice I voted 5 million.
But actually I would say 5.5 million, which I think is more realistic and still much better than 6.15 million.
I hope you are submitting on the climate change report.

by Audaxes | 19th Feb 21, 8:22am 1613676164

Rise of Retail Army Shrouds Half of U.S. Stock Trading

by Kate | 19th Feb 21, 10:58am 1613685503

Wish it wasn't paywalled! Part of me wishes that there had been system-wide failures (a big shock, arising from the big short) as a result of the Reddit/Gamestop fiasco. I keep hunting for an article/analysis that models for us exactly what would have happened had that been allowed to play out to an end game.

What would prevent regulators deciding that one cannot short any more stocks than are actually in existence? Seems so logical that we get back to real world markets.

by iconoclast | 19th Feb 21, 11:32am 1613687550

I read that article
Don't agree with a fair bit of it

Much of it uses emotive language without naming names
Internalisers
Dark Pools
Away from Exchanges
Off-Exchange
Arranged in Secret
Private Markets

A very large proportion of Market activity is not done via phone-brokers
Most private individuals now use trading platforms themselves where they can see the placement of their orders and the execution

I have yet to see an accurate explanation of the Gamestop phenomena
Most of the articles (and I have followed them) are waffle and nonsense

by Kate | 19th Feb 21, 11:47am 1613688460

But can you accurately quantify what you are saying is a 'large proportion'? Though I can't read the article I assume (from the title) that is the point they are making (i.e., the vast majority of trades are not transparent in the way you describe?).

If you come across a good analysis, I'll be keen for a link that I can access :-).

by Zachary Smith | 19th Feb 21, 8:42am 1613677335

I think using mass immigration to achieve population ~~growth~~ diversity is central to the plan. For a long time now the 'Steering Committee' have known that humans do not respond to reason like we would think but instead simply react or reflect the environment they are immersed in. Social control can be achieved through modifying the social environment through seizing control of almost all modern communications media as well as changing the demographic makeup of society. The so called 'smart phone' and having everyone glued to it continuously has been a godsend for this project. Perfect for the algorithms to work their magic.

The Internet also makes it much easier to live in different counties and cultures. There is a big effort going on to put fast Internet everywhere on the planet.

Along with mass immigration this has had multiple economic benefits for governments and corporations as well as essentially eliminating all possibility of dissent and rebellion by making it impossible to organise at a tribal level. Everyone is reduced to individuals in a sea of diversity but most are just individual lonely sheep. It actually takes a lot of effort, concentration and risk to be a true individual and very few achieve it. The rest are just bobbing along in a deeply anxious state on the waves of the social milieu they are immersed in. A milieu that is directed rather than controlled.

It could turn out okay, I guess, but it will probably have unforeseen outcomes. It's not 1984, it's not Brave New World but it is something similar, dystopian and a bit frightening.

by BadRobot | 19th Feb 21, 10:49am 1613684975

A failed "Enlightenment" project to create a utopic world.

by Computer | 19th Feb 21, 1:02pm 1613692953

The multiculturalism ideal isn't guaranteed to translate well in practice. Rather than the hoped-for 'melting pot' parallel societies can form, many of whom bear little allegiance to their adopted country.

by bw | 19th Feb 21, 9:06am 1613678811

Speaking of Household Debt: (via CH Smith)

The reason why central banks have slashed rates to zero is obvious: if the bottom 90% can't borrow more money at 5% to consume more goods and services, they can certainly borrow more at 1.5% because the interest part of their monthly payment drops significantly.

And sure enough, crushing rates to near-zero has triggered refinancing/housing bubbles and generated high auto-truck sales based on a few dollars down and 1.9% auto financing.

In other words: as the purchasing power of wages has relentlessly declined, the "fix" is to substitute debt for earnings. The fact that eventually stagnating earnings cannot support more debt at any rate of interest is inconvenient, so it's been ignored.
This has poisoned society and its economy. This immense distortion in the cost of capital can best be understood by asking:

"What happens when a resource (like Debt) is free?

The answer is that it's squandered.

by Audaxes | 19th Feb 21, 9:01am 1613678498

Europe braces for pandemic reality to hit banks. Unpaid debt from pandemic-stricken borrowers has ravaged profits at Europe’s big banks and kick-started a debate among politicians about whether they may ultimately need state help. https://reut.rs/3pq5X9i
Link

by Audaxes | 19th Feb 21, 9:04am 1613678695

Officials spelt out their concerns in a report presented to euro zone finance ministers who met on Monday, warning of “wide-scale corporate distress”.

In the document, they highlighted the extent to which banks rely on governments to help borrowers.

by Audaxes | 19th Feb 21, 9:19am 1613679596

The government can (because of overwhelming demand in the Treasury market, even as long end yields rise) and should aid workers and especially small businesses where even remotely possible. This is not, and has not been, “stimulus.” And if what’s holding back the economic rebound is much more than the pandemic panic, Uncle Sam’s payments will have to continue being the largest marginal factor. Link

by Ezy | 19th Feb 21, 9:57am 1613681855

No one will be able to pay back this level of debt. Fiat is gone-burger.

Crypto is like a whole bunch of new islands growing out of the financial sea. Stimulus is the rising tide, lifting all the markets, drowning the average punter in poverty as it goes. The wealthy elite in their boats of all shapes and sizes (stocks and bonds) are laughing at the people on the islands telling them they're going to drown. "Islands never keep growing out of the sea indefinitely", they say. But every few weeks the tide rises, the elite on their boats go up with it, and miraculously the islands keep growing just as it looks like they're about to be swallowed by the sea.

When the well springs are exhausted, and the sea gets sucked back into the deep recesses of the earth, it will be with turbulence and great violence. The grand old boats, pleasure craft, and super yachts of the traditional system that people have become so accustomed to will break up in that turbulent sea. The islands will suffer damage, but be left as giant mountains since the sea has subsided.

The average punters with their commodity continents and hard assets who went underwater for a time but are still alive, will breath again and be thankful that their large land mass stayed constant and weathered the mighty storm. Except for the ones that granted many of the large boats anchorage on the promise of expanding their holding, and were uprooted on the rising tide alongside those same boats in the great storm.

At that time, the people on the mountains will hang their head and say, "If only they'd listened".

by profile | 19th Feb 21, 9:13am 1613679211

Variation in Covid death rates globally. Keep fit chaps.
"Higher Covid death rates are observed in the [25/65°] latitude and in the [−35/−125°] longitude ranges. The national criteria most associated with death rate are life expectancy and its slowdown, public health context (metabolic and non-communicable diseases (NCD) burden vs. infectious diseases prevalence), economy (growth national product, financial support), and environment (temperature, ultra-violet index). Stringency of the measures settled to fight pandemia, including lockdown, did not appear to be linked with death rate.

Conclusion: Countries that already experienced a stagnation or regression of life expectancy, with high income and NCD rates, had the highest price to pay. This burden was not alleviated by more stringent public decisions. Inherent factors have predetermined the Covid-19 mortality: understanding them may improve prevention strategies by increasing population resilience through better physical fitness and immunity."
https://www.frontiersin.org/articles/10.3389/fpubh.2020.604339/full

by KH | 19th Feb 21, 9:23am 1613679803

thanks profile. Great info. Just off for a fast walk on the beach when the tide gets a bit lower. The dog is the one who manages my health apparently.

by Cowpat | 19th Feb 21, 9:32am 1613680323

And speaking of household debt , "US household debt is now at 67.8% of US GDP. (New Zealand is at 97.0% on the same basis.)". David , is student debt included in the New Zealand data ?

by Kate | 19th Feb 21, 11:02am 1613685749

Good question - and also is it included in US household debt? Need an apples to apples comparison.

by Chris-M | 19th Feb 21, 9:59am 1613681969

US reducing life expectancy. Apart from the preceding year or so this has been on a static or declining trend for quite a while. In an article that I read quite a while ago it said that drug overdoses was a very significant factor for the deteriorating trend. It also laid a lot of blame for this at the feet of the the pharmaceutical companies and the medical profession.

by fortunr | 19th Feb 21, 10:51am 1613685086

Am I the only one deeply concerned about the future of the bond market ? I see a very bleak future for bond prices, and I would not exclude serious financial systemic problems arising from it. I think that what is happening with Germany's bonds is just the start.
I might want to watch this space when searching for one of the potential sources of the next financial crisis.

by another andrew | 19th Feb 21, 10:45am 1613684729

Just been notified by starlink.com that their broadband internet service is due to be available mid-late 2021 and they are taking deposits. Quote: "Starlink is now available for order to a limited number of users in your coverage area. Placing your order now will hold your place in line for future service". Further from them: "During beta, users can expect to see data speeds vary from 50Mb/s to 150Mb/s and latency from 20ms to 40ms in most locations over the next several months as we enhance the Starlink system. There will also be brief periods of no connectivity at all. As we launch more satellites, install more ground stations and improve our networking software, data speed, latency and uptime will improve dramatically... Depending on your location, some orders may take 6 months or more to fulfill. To check availability for your location, visit Starlink.com and re-enter your service address". Details: $159/mo, $913 for equipment+shipping. They charged me the $159 deposit/1stMonth in NZD so I presume it all is NZD.
Disclaimer: I have no association with Starlink or SpaceX except that, like Elon, I was born in South Africa.

by Nzdan | 19th Feb 21, 11:35am 1613687725

Welcome back.

by The Person | 19th Feb 21, 2:01pm 1613696510

150Mbits/s connection with high latency for $159 What is the appeal? Bit lackluster compared to NZD89/month 1Gbit connection. Is it the mobility?

by another andrew | 19th Feb 21, 3:03pm 1613700180

No fibre where I live. This is better than capped RBI

by Galloleous | 19th Feb 21, 4:28pm 1613705282

Obviously havent lived in rural NZ...Parents are still on 400kbs, yes that the one that is less than 1Mbs... And they are not far out of Hastings (also partly due to being stuck with an extra email address so are reluctant to switch from spark)