A review of things you need to know before you go home on Thursday; car flood, low Govt bond rates, high core funding ratio, Govt staffing 'stable', big home loan guarantee

A review of things you need to know before you go home on Thursday; car flood, low Govt bond rates, high core funding ratio, Govt staffing 'stable', big home loan guarantee
For Thursday, December 4, 2014. Image sourced from Shutterstock.com

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

TODAY'S MORTGAGE RATE CHANGES
There were no changes today.

TODAY'S DEPOSIT RATE CHANGES
Westpac has today reduced most rates from 18 months to 5 years, mimicking the ANZ reductions. TSB Bank also dropped rates, their 18 month, 4 and 5 year ones.

RUNNING OUT OF STEAM, EXCEPT ...
The QV house price index out today shows prices up but by only 5.1% year-on-year which is the lowest gain since August 2012. In fact the national index actually fell in November. Auckland however 're-accelerated'.

CAR FLOOD
Registrations of used imports are booming. November saw 11,532 added to the national fleet, far ahead of the 8,063 11,176 new cars also added. This means that for calendar 2014 we will probably have added a total of almost 220,000 new and used import cars to the national fleet. That will be the highest since 2006.

BOND BIDDERS TAKE LESS
The latest Government bond offer - and inflation adjusted 'linker' - attracted good demand today by keen bidders. In fact the yield dropped noticeably from the last tender to 2.37%, down from 2.55% (both plus CPI).

RECORD HIGH
Today's release of the banking system core funding ratio edged up to 86.3% in October from 85.5%. That is the highest level it has been since the metric was first tracked in April 2010.

WORKING FOR YOU
The State Services Commission today released details of 2014 staffing levels as at June. There are now 47,100 people in the public service departments, 66,000 in the DHBs, almost 105,000 in the public education sector, 8,800 in the military, and 38,000 in all other departments like the Police and the IRD. The grand total is 229,600, up 3,400 in a year. That is a +1.5% rise. It is also 9.9% of all employment.

INVESTORS IN NZ COVERED BONDS GET BETTER QUALITY
Moody's likes the New Zealand covered bond market. It is rated Aaa and has a very low collateral score of 8.2%. The weighted average current loan-to-value ratio of the residential mortgage loans in the cover pools ranged between 47.1% and 56.9%, compared to a range of 47.8% and 57.2% in Q2 2014. Investors in these bonds have the cream of the loans backing them up.

GUARANTEEING HOUSING LOANS
Auckland ratepayers are now guaranteeing social housing financing. The Auckland Council has agreed to underwrite "housing bonds" worth $30 million to kick-start more than 200 new homes for low-income families. The council's development committee voted 14-5 yesterday to guarantee 20% of the bond issue, or $6 million. The guarantee will allow community housing providers to borrow on more favourable terms, reducing the costs of homes by between $6,000 and $8,000, the NZ Herald is reporting.

ASB PUSHES OUT OCR HIKE EXPECTATION
ASB's economists now don't expect the Reserve Bank to increase the Official Cash Rate until December 2015. Previously they expected a hike in September next year. Post next December they're forecasting one further OCR increase for a peak of 4% in March 2016.

WHOLESALE RATES
Swap rates continued their retreat today. They are down 1 and 2 bps, for terms 2 to ten years. The 90 day bank bill rate was unchanged at 3.67%.

OUR CURRENCY HOLDS
Check our real-time charts here. The NZ dollar eased again today. It is now at 77.5 USc, at 92.2 AUc, and the TWI is at 78.1

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Local Government Commission recommends Wellington region amalgamates into a "super"city.
 
And I score a magnificent 1 out of 3 for my predcitions for 2014. Although Len Brown still has 4 weeks to resign and edge me up to 2 from 3. Go, Len!    (In so many ways)

4.5million population and we have 229,600 under the State Services umbrella....thats roughly a 1  to 19 ratio..........come on National sloppy sloppy work......you can't expect the SME's to keep working their butts off while all these key-tapping, coffee supping hangers on lounge about !!

All a waste of tme effort and money.
When you add in the combined effect on the working population, it is no wonder we owe a great debt to society.
And that society is the entitled brigade.
Start at the top and cull the waste and New Zealand would be back in profit in no time flat.
When rates and taxes and benefits are all these people think about, think what what could be achieved if we dropped off the dead weights we are all carrying.
It is not as if we have a perfect record, from all this munificence.
Whilst this is not the first time I have remarked in this way, I shall leave you with a few thoughts. If we had everyone educated to dumb down the system, would we need so many hangers on.
It is not Friday, but it is pertinent, in a small funny way. It may also explain why we are  so dependant on China, to dig us out of the mathematical weight of the above, teachers included and you can add in the Financial whiz kids we employ to go backwards, not forwards.
 
And here is the simple test for Friday.

> Since nearly everyone has an interest in education I thought this may
> explain the changes in teaching from the middle of last century through to
> the middle of this.
>
>
>
> 1. Teaching Maths In 1950s
>
> A logger sells a truckload of timber for £100. His cost of production
> is 4/5 of the price. What is his profit?
>
>
> 2. Teaching Maths In 1970s
>
>
> A logger sells a truckload of timber for £100. His cost of production
> is 4/5 of the price, or £80. What is his profit?
>
>
> 3. Teaching Maths In 1980s
>
>
> A logger sells a truckload of timber for £100.
> His cost of production is £80. Did he make a profit ?
> Yes or No
>
>
> 4. Teaching Maths In 1990s
>
>
> A logger sells a truckload of timber for £100. His cost of production
> is £80 and his profit is £20

Your assignment: Underline the number 20.
>
>
> 5. Teaching Maths In 2000s
>
>
> A logger cuts down a beautiful forest because he is selfish and
> inconsiderate and cares nothing for the habitat of animals or the
> preservation of our woodlands.
> He does this so he can make a profit of £20.
What do you think of this way of making a living? Topic for
> class participation after answering the question: How did the birds
> and squirrels feel as the logger cut down their homes? (There are no
> wrong answers, and if you feel like crying, it's ok).
>
>
> 6. Teaching Maths In 2050
>
>
> هاتشيرو تبيع كارلواد من نهاب 100 دولار .
> تكلفة الإنتاج هو 80 دولاراً . كيف الكثير
> من المال ولم؟
I make no apologies, this I received today from abroad. Maybe it is a common problem world wide.
Maybe we are all as dumb as we look. I used to think it was me who could not do maths.
Maybe it is all relevant. Profit and loss, for the masses.
PS, you could change the ending, I do not care,  but it is pertinent as it stands.
If that is zeno...so be it. But I can add and subtract, even in my dotage.
 

So ASB bank predicts "no interest rate hikes for the entire 2015 year".  Given that all banks have been predicting significant rate rises every year for the last 5 years - then you could decipher this prediction as room for a possible rate cut/s.   
 

Mortgage Guarantees: I worked on the write-offs of the Government Mortgage Guarantees (there were several variants but essentially any institution admitted to a list could write its own cover) in the 1980's and 90's -along came the '87 crash and red ink everywhere. Countless $millions of taxpayers money lost and no accountability anywhere. Good luck trying this again!
Ergophobia