Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
TERM DEPOSIT RATE CHANGES
None here today either.
SALES RATE RISES
Auckland realtor Barfoot & Thompson's auction sales rates range from 67% for North Shore properties to 79% in Rodney, as they report fewer auction sales but a better sales rate.
KING DUKE
Briscoes (BGP) announced a $73.2 mln full year profit, up +17%, on sales that exceeded $700 mln. And that was despite their investment in Kathmandu not returning anything this year. (Briscoes is not in the NZX50 because it is controlled essentially by Rod Duke and liquidity is too low to be included in the index. If it was included, it would rank as #25.) Its shares rose +5.5% today.
FAST ATROPHY
January credit card transaction levels came in -5.2% lower than for the same month in 2020, so that confirms the retail slowdown, principally due to hospitality. Credit card balances however have fallen -$1.0 bln in a year, and -$244 in a month, the most since the March and April 2020 lockdown collapse. Now only 55% of credit card balances incur interest, a record low. Buy-Now-Pay-Later activity is eating away at the credit card business. But we know very little about BNPL, an opaque corner of the debt business that is avoiding any regulator scrutiny.
GOLD HOLDS
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1733 and up +US$1 from where it closed yesterday.
EQUITIES GENERALLY HIGHER
The S&P500 traded almost all its session flat, then had a very late burst higher to end up +0.7%. It was a tech thing. The NZX50 Capital Index is up +0.5% in late trade today and building on yesterday's good gain. The ASX200 is up +0.9% reversing yesterday's fall. In Tokyo, they have opened up +0.7%. That is matched by the Hong Kong open. Shanghai has opened up +0.5% reversing half of yesterday's fall. In a month, Shanghai has lost -6.5% despite their "home team" interventions.
SWAP & BONDS RATES MIXED
We don't have today's closing swap rates yet. If there are movements today, we will note them here later when we get the data. The 90 day bank bill rate is up +1 bp at 0.33%. The Australian Govt ten year benchmark rate is soft at 1.72% and a one-day fall of -5 bps. The China Govt ten year bond is holding higher at 3.29%. The New Zealand Govt ten year is down -7 bps at 1.79% and now slightly below the level of the earlier RBNZ fixing at 1.80% (+1 bp). The US Govt ten year is -2 bps softer from this time yesterday at 1.59%.
NZD HOLDS
The Kiwi dollar is now at 72 USc and basically on hold. On the cross rates we are up marginally to 93 AUc. Against the euro we still at 60.4 euro cents. That all means our TWI-5 is still just under 74.1.
BITCOIN DROPS SHARPLY
Bitcoin has fallen to US$53,926 which is a drop of more than -US$5,800 in one day or -9.7%. That is the second largest daily drop ever and as today isn't finished yet, it may still take the record. The decline seems to be building late in the day. Volatility over the past 24 hours has still been a sky-high +/- 6.8%.
This soil moisture chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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42 Comments
Credit goes to Jacinda Arden to create a new breed of beggars - FHB with million dollar
https://www.newshub.co.nz/home/money/2021/03/first-home-buyers-resort-t…
Kudos to Jacinda and Robertson for jointly achieving a feat of creating new breed of beggars - FHB who with money are going begging for a house.
David chaston your response, is it a truth or myth or can even deny or avoid just like Jacinda
Meanwhile, Grant Robertson questions govt investment vehicles ethics https://i.stuff.co.nz/national/politics/300253911/grant-robertson-wants…
Standard reply frim both robertson and jacinda :, Waiting for more information or Waiting for advise.
If at Midday, you ask him is it noon, his first reaction will be Waiting for more information and if yoh ask with Jacinda will reply Waifing for advise
Both stand exposed Now.
First-home buyers are resorting to extreme measures to buy homes, using targeted letterbox drops, door-knocking with cash offers and trying to view properties before they're listed..
What defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows. The defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.
“As long as investors focus on year-to-year returns and not discounted cash flow calculations, the bubble can continue to grow in self-reinforcing fashion. Investors anticipate a high return, and the price behavior reinforces the expectation. The true long-term return becomes increasingly detached from the long-term return imagined by investors, and the bubble component accounts for an increasingly large proportion of the total price.” Link
A good read. Thx.
This is how very bad things have repeatedly happened in the financial markets across history, enabled by what Galbraith called “the extreme brevity of the financial memory.” The trap door quietly swings open when valuations are extreme and market internals begin to deteriorate. That’s the situation we’ve observed in our measures in recent weeks, with the initial deterioration largely driven by debt securities, but with increasing divergences in equities as well....By our most reliable measures, run-of-the-mill historical valuation norms are roughly 70% below current levels. We’re currently farther away from “typical” expected returns than at any moment in history, including the 1929 and 2000 market peaks.
I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue... driven by nothing more than the sudden concerted effort of overextended investors to sell.
The truth is simple but uncomfortable.
Well, I'm in Christchurch and definitely get a few in my letterbox every year - often hand-written, photocopied pleas from FHB. Lots of companies wanting to buy as-is-where-is properties here too. I rent so just chuck them in the recycling to be turned into egg-cartons?? .. I guess lol
There's nothing wrong with it. Real Estate Agents/Salespeople do flyer drops all the time. It's an opportunity for property owners to avoid sales fees. Granted it speaks to demand and if you never take your property to market, you'll never know what the market would have paid. I imagine getting a good valuation in these situations is key.
More money to be made when property climbing price, at least until 2025.
NZ has not yet catching up to be no.1 - so more room to go by govt & RBNZ to ensure this. Tweaks:
Demand: No OB, No LVR (back again just for PR), FLP for housing, ensure no CG, lower OCR, Stimulus
Supply: Tweak the RMA(pretend), more KB;-), no cheap foreign labour and other legislation to slow it down.
The major points is: if clearly the NZ is heavily rely on F.I.RE economy? means any tweak is a 'must' to maintain the self fulfilling price trajectory - any tweak to tone it down? will be responded by market in brutal way.
Hence, the slogan team of 3.5m 'to be kind each others' - lucky those 1.5m that already displaced abroad.
Don't voters have to take some responsibility? We live in a democracy [supposedly], these problems aren't new. In many ways Kiwis are suffering under a yoke of their own making.
It's a hard truth, but to quote Michael Jackson, "I'm talking about the man in the mirror". I take my civil responsibilities seriously, perhaps you do too - but in a democracy it's the majority that counts.. under MMP, even a high-single-digit percentage of responsible citizens would have counted!
We don't live in America or Europe where you can just drive to a different state/country! The NZ citizenry has failed on housing. As housing is a necessity, NZ, for SOME, could be considered a failed state. What can I say, there is plenty of blame to go around, but MANY should start by looking in the mirror.
Ironic you picked MJ as an example of morality. Pretty bold to blame the population for the governments they’ve been voting in when these governments have repeatedly failed and/or refused to fulfill the policies and promises they were elected for. As Abe Lincoln so famously expressed - democracy is a government of the people, by the people and for the people. How many of NZs recent governments have done anything other than deliver lip service while our once egalitarian society falls apart?
Society votes for a government in confidence they will deliver their promised outcomes for the greater good. If they fail to do so or deliberately not do so, then the responsibility sits squarely with the elected officials. That’s the piece of democracy that’s missing - the accountability part
Jacinda said BEFORE the election:
- She wanted house prices to increase
- Capital Gains Tax [if ur a believer] would not happen
- She would respect the majority vote on proposed cannabis legislation
- She believed poverty/child-poverty was getting better
Voters aren't necessarily AT FAULT, but surely they need to accept blame.. otherwise won't they just continue voting against their interests?
The housing situation in NZ has been created through inaction and bad decisions over decades. It stands to reason the opposite would be true. That is; fixing the housing crisis by taking action and making good decisions moving forward. "Good" doesn't mean the pixies coming down from the sky.. there will be winners and losers - it would/will be tough at first, but results would fast follow.
She said kiwis “expect” house price increases, very important difference. Believing and achieving my rhyme but that’s where the similarities stop. Politicians are immune from true accountability that voters encounter in their workplaces, so I find that blaming the public for elected officials’ incompetence unsavoury. Is it too much to ask governments to just do their job, given the fat pay checks and kickbacks they receive from the taxpayer?
The politicians should already know their job. They campaigned for control of parliament by promising deliverables to the electorates and the public voted for the party with the plan that they believe will serve NZ best. Voters have the expectation that elected officials will deliver the plan because that’s how it’s supposed to work. Until it doesn’t
You're right of course.
They are there to represent their various constituencies, aka their electorates. Many people on interest.co.nz complain about housing, HOWEVER, when was the last time they took it up with their local MP?
Political parties more represent a vision for the nation. Most/ALL are currently visionless IMO. Parties able to form a government get ministerial reigns - a steering wheel. There will be legal definitions and handbooks relating to member's job descriptions.
I'm simply suggesting we ask them what THEY believe their job to be - the answers, I'm sure will be quite telling.
Partial solution is better than No solution
https://www.newshub.co.nz/home/money/2021/03/housing-crisis-economist-s…
Add DTI and may add to that partial solution
Define solution – what exactly is the problem we are trying to solve.
Once defined – you have a chance at a plan enabling a solution.
However, the solution may be very uncomfortable for some – and politically unpalatable.
So, now what are you going to do.
To my mind this is a complete shambles and the government of the day has simply no idea of what to do to fix it, and after having complete culpability of creating it – now will simply have to go back to their old game of lies, spin and mis-truths – because they don’t even understand what they’re trying to fix.
The solutions are manifold but those in power wouldn’t act on them as it would (1) required them to have long term vision (2) bring the people along with them and sell the vision (3) have courage (4) sell and tell all, there will be pain and sacrifice but the end justifies the means
Knowledge is knowing the right thing, wisdom is doing the right thing. Many great American statesmen have been independently wealthy. In recent times here in NZ, we had Gareth Morgan trying to make a difference. Not to say he was perfect by any means.
My point is; it's not always the rich that are/get corrupted by money. In a real sense having politicians whom are both rich AND wise is advantageous. Perhaps I'm wrong. Perhaps I'm not expressing my stream of thought well.. I'm happy to let this one float out to sea. lol :)
It's quite fascinating - I haven't really seen this in a very long time.
They have smiled, lied and spun while all along painting themselves into a politically impossible position.
I'm actually intrigued to see how, and if they really ever, get themselves out of this housing shambles mess of their own creation - in terms of self inflicted wounds, it's quite extraordinary.
Yeah.
Btw what's happened to that Unitec housing development?
That moron Twyford announced a major development early in his government's first term for the land, it was going to comprise thousands of apartments. A few years later, what's happened?
I might do an OIA.
The Washington Post has published an astonishing retraction two months after a bombshell story about a phone call between then-US President Donald Trump and an election's investigator in Georgia....the quotes attributed to Trump, and relayed to the media by an anonymous source, were false.
CNN also issued a correction today.
The false quotes were included in House Democrats' impeachment brief.
Now this government too believes in lying and manipulation in EVERTTHING they do.
https://www.newshub.co.nz/home/politics/2021/03/government-accused-of-t…
Last term as had other partners kept them little bit checked. Absolute majority is bad in NZ democracy specially when headed by ...........
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