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A review of things you need to know before you go home on Monday; home loan pricing tight, Govt debt unchanged, Treasury sees growth and inflation, Auckland housing wobbles, swap rates fall

A review of things you need to know before you go home on Monday; home loan pricing tight, Govt debt unchanged, Treasury sees growth and inflation, Auckland housing wobbles, swap rates fall
For Monday, May 5, 2014. Image sourced from Shutterstock.com

Here are the key things you need to know before you leave work today.

MORTGAGE PRICING GETTING TIGHT
Despite the OCR rate hikes, not all lenders are passing on the full 0.25%. In addition, there are a growing number of 'specials' being offered for fixed terms, especially for terms of three years and longer. We may be about to see the end of any fixed mortgage rates above 7%. That means almost all offers will be between 5.7% and 6.99%, a very narrow range. International money prices are holding down fixed rates.

GOVT DEBT LITTLE CHANGED
The data out for April government securities on offer shows $75.859 billion outstanding. This is a decline of $121 million from March

TREASURY SEES INFLATION
In its monthly economic commentary, Treasury says there will be "a strong pace of growth" in the Q1 GDP figures which will come out at the end of June. They say the economic momentum is set to continue. They also say that "rising demand is expected to lead to greater price pressures."

AUCKLAND HOUSE MARKET WOBBLES
The lumber of listings in Auckland slump, although Barfoot saw some gains. But both the median and average prices from the low Barfoot sales in April saw declines. Maybe the LVR restrictions are not going to be around much longer.

WHOLESALE RATES FLATTEN
Swap rates fell following the fall in bond yields in New York on Friday. We saw smaller falls at the short end of 2 bps, up to larger declines of 5 bps for seven and ten year swaps. The 90 day bank bill rate rose today, up 1 bp and is now at 3.32%.

OUR CURRENCY
The NZ dollar rose today after weekend gains. The NZD is now at 86.6 USc and 93.5AUc. The TWI is at 80.5. Some experts are having trouble understanding what is holding the NZD up.

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3 Comments

Rate cuts looming in reality.
If you have a product to sell (money) then you need to meet the market (borrowers). 
Banks need borrowers. 

Below may give sense as to Fonterra's lost earnings in Australia and a birds eye view of our supermarket masters and similar
.
THE competition regulator has begun Federal Court action against supermarket giant Coles alleging the retailer engaged in unconscionable conduct by using its market power to force suppliers to pay rebates.
http://www.theaustralian.com.au/business/coles-to-court-over-supplier-rebates/story-e6frg8zx-1226905810415#
and
According to court documents, a target of $30 million was chosen to squeeze from suppliers and even a script was written to help Coles representatives talk to their supplier accounts and to get them to hand over the cash.
The ACCC claims in its statement of claim that Coles did not provide any information to Red Bull as to how Coles arrived at the figure of $400,000 or $200,000.
But shortly afterwards Red Bull said ‘no deal’ and refused to pay $200,000 to Coles. It told Coles, orally and in writing, saying its total cost to serve Coles was less than the $400,000 that Coles said was the value to Red Bull.
But other suppliers seem to play ball. Ongoing negotiations with some of the biggest suppliers in the world were baring fruit.

Read more: http://www.smh.com.au/business/retail/cash-for-coles-making-suppliers-pay-20140505-37rz5.html#ixzz30p2tcVsE

 

It is OK, we will have enough beneficiaries to lend to.  Gotta maintain the deficit.
Like America, they will grow and grow and earn less and less, but others will pay exponentially.
It seems that if you are a beneficiary you will get preferemtial interest rates to keep them away from he loan sharks, who prey on the unwary, who are not fiscally prudent.
So instead of banning the loan shark practice, that the lending banks are rorting with only a mere 20%+ from the unwary who thrive on credit cards,( I do not think),  the beneficial practice will now be to keep them away from pay day loans instead as these can be up to 1000% per annum, if left to run as the sharks hope and prey, religiously.
Neither rort should be allowed to happen, especially at the taxpayers expense.
Perhaps we need to teach fiscal prudence to children and 1st home buyers, then work our way up the scale to the Fractional Reserve Banking cartels who are also rorting the unwary, but by fractions that add up to a lifetimes of indebtedness as they compound their own problems daily, monthly and yearly, often for the rest of their lives plus fees, plus interest, plus a free TV, that never has been free, in my estimation.
Plus the car, bed, boat, rental, on top, all carried by a system that rewards debt via hefty inflation and compounding at the expense of those that knew better.
But thought that money was theirs, until it was frittered away by the nutters of State.
(And now in the National Interest, as debts keep it up and up and up)
That it has now become a beneficial state to maintain the debts of others, this will be foisted on the fools who never got into debt, but looked after their own interests, all their lives and get taxed on it.
And so the merry go round, gets played out, by a Beneficial Minister who nationally is rewarded with humungous largesse, so wants all of her ilk to benefit, top and bottom.
And what a big bottom it is appearing to be.
While the poor pratts in the middle, work their arses off to maintain the status quo or even go backwards, spiralling down, whilst others inflate.
So I suggest whole heartedly, that all aspiring workers, become shirkers, then we can all benefit from printing money and we can all sit down and play monopoly for the rest of our lives as per QE, BE, JK BB, BO and his new beau Yellen and anyone else whose schemes are never working for other than those with a real vested interest to avoid.
Pump dump, short, long, forge- tit, print, taper, all a comedy of errors and the biggest fools are those not playing the pokkies and the porkies.
http://www.interest.co.nz/kiwisaver/69746/lawyers-look-universal-kiwisav...
Compulsive savers can never beat compulsive borrowers, especially when some one else is creaming the top off the scam.
So we can keep the party rorting along, kicking the can.
Printing, posturing. Talking big, talking to other bigshots. 
Still in deficit...and always will be.
Unless laundering, pandering and back scratching becomes illegal, which I sincerely doubt.
Justice is fractionally legally stealing a march, yer pension, buying votes, buying bad debt, bad derivatives and foisting them on the unwilling, but who know no better.
Signed the Fed. 
 

Days to the General Election: 26
See Party Policies here. Party Lists here.