Here's my summary of the key news overnight in 90 seconds at 9 am, including news the New Zealand dollar firmed to over 83.2 USc overnight as investors put risk back on the table after another rally in US stocks.
The S&P 500 rose 1% after Spain unveiled its 5th austerity package in 9 months, a move widely seen triggering a Spanish request for a bailout and the unleashing of the 'Big Bazooka' of unlimited bond buying by the European Central Bank. See more here at Bloomberg.
Spain announced 40 billion euros of government spending cuts, a tax on lottery winnings and a raid on a national pension fund to increase pension payments as it battled to meet its current deficit target. See more here at Bloomberg.
However, the new budget plan left Spain's growth targets unchanged and many investors remain worried the deeper austerity will drive Spain even deeper into recession, increasing the relative weight of Spain's debt.
A wave of popular unrest has swept Spain and the restive region of Catalonia in recent weeks as voters, many of whom are unemployed, protest the cuts and increasing control from Brussels.
A clash between politics and economics is shaping up as the key driver in financial markets. However, for now, markets liked the latest Spanish budget plan. The 10 year Spanish bond yield fell to 5.95% from over 6%. See more here at Bloomberg.
Elsewhere, there were hopes China would act to stimulate its economy. This came after the People's Bank of China injected US$58 billion worth of liquidity in the form of reverse repos into the Chinese Banking system in advance of the Golden Week holiday, where many people travel to visit families and spend plenty of cash. See more here at Bloomberg.
These moves to put 'risk back on' saw the New Zealand dollar rise over 83.2 USc and up to 79.5 Australian cents. The Trade Weighted Index rose to a 8 month high of 73.72.
(Updated with detail, links)
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Bernard and Hugh, have you seen the geotech reports released yesterday?
http://cera.govt.nz/geotechnical-information
This is shocking stuff. They have released only glossed over summaries which tell nothing much more than what a lay person could observe looking at the land.
The actual borehole data is not given and only selected (and largely irrelevent due to their location) CPT results are given.
The evidence presented clearly shows that areas like River Rd to Harvey Tce in Richmond are not badly damaged but zoned red. Whereas Wood Ln and Helmores Ln in Fendalton are badly damaged but are zoned green.
Indeed in these two locations, the Richmond land had boreholes tested in 3 locations along the river margin, and none back from the river, but in Fendalton the boreholes were only taken 100m back from the river.
It seems the decision has been made on the basis of one area being expensive land with vociferous land owners and the other is a cheaper area with low valuations, less contentious owners and a nice place to put a park to clean out the riff raff.
Obviously they have considered any area with significant river bank damage too difficult to fix (provided it is not in Fendalton), and any area with significant damage constrained within other land parcels (say on old stream bed) such as in Charleston or Edgeware or Parklands is fixable.
Unfortunately a lot of this is just laziness.
A top down approach that just upset a huge number of residents - so much that many have left town and NZ completely.
The evidence shows that the red zones are not some hard and fast boundaries. Many could have been malleable, allowing those who wanted out - out and those who wanted to stay - to stay.
When will they learn, democracy is not a three year dictatorship!
Thanks Hugh, I scaled back our building intentions after the December quake and am only now getting consents sorted for a few selected projects (we've decided it's only worth building larger stand alone townhouses or houses right now priced in the $425-525k range). One at a time and I'll see how it goes from here (I got a bit burnt with a development that developed lateral spread issues so it's sat idle tying up the better part of half a million with no land cover for the last 2 years and nothing likely to happen anytime soon!).
We've got major repairs to about 15 properties in the pipeline, which is a big job in itself.
But my main focus in the near term is to get the first of our commercial CBD developments off the ground, which should be interesting. (The geotech is exceptionly good, so it dispels any nonsense about the CBD not being the right place to rebuild).
BTW I got another QS report back last week, for a single level replica villa about 120m2, $3100/m2 all up. Even pricier than I thought.
Improving building methods is definitely the key to cost reduction.
Hugh, we had to spend the insurance money in Auckland as we were forced to replace rather than take cash.
However with about 1ha of L3 and L4 land and lots of outer suburban stuff too, we are pretty committed to the city.
To be honest what has been going on has got me so angry that I had to do something to try and turn things around.
I have no new confidence in what is going on, but I am confident that there is a real shortage of housing (given 20,000 houses are gone and only about 30,000 people have left - perhaps a shortage of 8-10,000 houses) and that there is a real demand for the right commercial space.
Current pricing allows for some truly opportunistic purchases. The flow of insurance cash into Canterbury will be significant despite many leaving.
I don't think that there will be a huge amount of new CBD activity over the short term, but I may as well be involved in what is happening. It's cheaper to get in sooner rather than later, and we can get involved in the most dynamic and exciting projects - and even better prove to CERA that we don't need extreme intervention.
High priced fuel syndrome:
http://ourfiniteworld.com/2012/09/26/high-priced-fuel-syndrome/
....it's certaintly a major suppresent of economic growth. I saw a chart the other day on QE (money printing) and fuel prices, how they correlate closely, it was on business insider. Not sure if this serious harm being done to growth is only organic (supply / demand related)
My grandfather used to be mayor of Glen Eden for 12 years and on the ARA for 16 years. He was a strong advocate for public transport and regional parks. Retired before Glen Eden became part of Waitakere City and the ARA was corporatised into the ARC (which is when the trend to "bigness" and high salaries started with CEO Colin Knox)
Any person day or night could ring him with an issue. The mayor and councillors were all part time yet all the ammenities were there and worked. Yes local body politics could be petty but there was definitely a strong local community. Once the coucil was amalgamated Glen Eden became a forgotton backwater yet only 20 minutes from the city. The mainstreet today is virtually identical to how it was 25 years ago. Its like progress suddenly stopped. Nostalgia? Probably but there are plenty of negatives to "bigger is better" especially when the much vaunted economic savings prove illusory.
How can a PM still be in power, mistrusted by the nation in such a high degree ?
Considering the low ethical standards in general and JK previous lies, is it possible he knew all about, but intentionally did nothing, because he personally doesn’t like “Kim Dot.com” ?
Do you mistrust Bernard Hickey too , Walter , because he was scathing of Kim Dotcom's personal life and his business practises .......
....... as I recall , Hickey said that Dotcom and his co-horts ought to be " thrown to the wolves at the FBI " .......
Do you still feel that way , Bernard ....... or are you willing to offer Kim Dotcom a public apology , as John Key has done ?
Yes , Count , it's the same way with ex-smokers ...... how scathing they are of anyone who still smokes ,... " how can you , that dirty filthy habit .... ugh ! " ........
..... ex-lard asses are equally dismissive of the corpulent folk around us ...... correct , Bernard ?
Like him or not , Dotcom is a " game-changer " ..... shaking up the stodgy old established media firms , giving air play to music wannabes , and providing a cheap source of entertainment to his customers ...
... ... using the new technology of the internet , kind of 'like interest.co.nz is doing , dontcha reckon , Hickster !
How can a PM still be in power, mistrusted by the nation in such a high degree ?
Kunst , I guess the overt crass stupidity surpasses the absent integrity and makes us largely believe we are safe from the intention to deceive.
I remain eternally grateful that our politicians exhibit acts of stupidity on a regular basis - I feel much safer.
When J.K. worked on Wall Street, he wasn't called "the Smiling Assassin" for no reason !!
http://www.youtube.com/watch?v=XxRCjwYcc1I
http://www.youtube.com/watch?v=qyiDgG1gya0&feature=relmfu
..... and for those who wish a snippet or two of good news ( you're on the wrong site entirely , guys ! ) researchers in the US have perfected a water soluble silicon chip ! A mere 300 nano-metres thick , it is coated in a silk layer , and ultimately dissolves away ..... the applications envisaged are for implanted medical devices ( no need for secondary surgery to remove the chip ) , and for consumer electronics ....
A second good news item , is that medical scientists at Monash in Melbourne are making progress on a " bioinc " eye , to bring sight to the blind .... and there is an estimated 275 million people worldwide with severe vision impairment .
......mankind is achieving the unpossible : life is good , friends , and getting gooder by the day !
Yup enough said.Here is another classsic example of NZ syndrome:
http://www.stuff.co.nz/business/7748118/Fancy-a-little-Miami-Vice-in-Du…
A developer wants to put a hotel on the complete dump of what Dunedin calls a 'waterfront'. Lo and behold look at the complaints:
"Plans for the controversial five-star, foreign-invested hotel were first announced in May and 67 public submissions have been lodged with the council so far, with more than half opposing the building."
Pretty natural really, most people have lives and don't bother to lodge submissions in support, whereas serial complainers on the other hand ...
"Building such a tall hotel on "what used to be a very marshy swamp" could land Dunedin with its very own Hotel Grand Chancellor - the Christchurch hotel left critically damaged by the earthquakes - architect Tim Heath said."
I see, the risk of earthquake is now going to be cited NZ wide for doing absolutely nothing.
"It would block harbour views for many parts of the city and cause significant shading to nearby areas, it would cause wind turbulence issues so close to the harbour, it was "completely out of context" and Heath did not believe Dunedin had enough resources and energy to support such a huge project."
Yes it would block the view if you happened to live in any one of a number of shitty abandoned buildings that now adorn the jewel called Dunedins waterfront. As for Dunedin not having enough resources and energy to support a solitary building. Is this the same city that wanted half of Chch to relocate there? FFS.
As for wind turbulence, its a wonder they have managed to build tall buildings anywhere else on this planet. 28 stories isn't even tall in many jurisdictions.
"Other opposing submissions that had already been lodged said the hotel would be "totally out of proportion and character to the surrounding buildings" and there was "no place for such a tall building in Dunedin"."
Out of place because it won't be derelict shed?
Why would investors bother, may as well send a few UN aid tents, even then you probably need a resource consent to erect.
woah Stephen, having a glass not only half empty, but half empty with flat warm beer day today?
We don't need to worry about the poor - I was reading last night that climate change is already killing off 400,000 people a year, and with african women having to walk an average of four miles to get fresh water, along with food prices estimated to double early next year due to the drought in the US and India... aaaaand very soon the poor will no longer be with us.
See? Problem solved, you can cheer up now...
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