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US home sales rise, living with parents rises; China unhappy with NZ; more commodity speculation coming; Italy ready with bank bailout; oil slips, gold unchanged; NZ$1 = 69 USc, TWI = 75.8

US home sales rise, living with parents rises; China unhappy with NZ; more commodity speculation coming; Italy ready with bank bailout; oil slips, gold unchanged; NZ$1 = 69 USc, TWI = 75.8

Here's a special holiday update of some key events and data you may want to know about today.

Firstly, American home resales volumes rose much faster than anticipated in November, reaching their highest level in nearly 10 years, probably because buyers rushed into the market to lock in low interest rates in anticipation of further increases in borrowing costs. It was the third consecutive monthly volume gain. The median price is now NZ$340,000, up +6.8% in US dollar terms in a year and the 57th consecutive month of price gain. Mortgage applications gained as well.

Maybe one reason American homes are getting larger is that almost 40% of young Americans were living with their parents, siblings or other relatives in 2015, the largest percentage in 75 years according to a new analysis of their census data.

The Chinese government is claiming "discrimination" in New Zealand's investigation into galvanized steel imports from China.

Persistent heavy smog in North East China is causing massive flight delays in and around the Chinese capital, snarling traffic and even pushing up vegetable prices. More than 350 flights have had to be cancelled.

And staying with a Chinese theme, speculators – including 5,000 Chinese hedge funds trading in commodities - are expected to use commodities as an inflation hedge as well as hunting for greater returns, in 2017. They are expected to pile in to contracts with a bullish supply and demand story. A herd rush is in prospect.

In Italy, their parliament has approved a government plan for a €20 bln bailout of the country's banks. The Italian Treasury will probably have to rescue Italy's third largest lender, Monte dei Paschi, by the end of next week because a private capital raising seems to have failed. The rescue fund will be used to prop up other banks as well.

Here at home, the number of online job advertisements grew by +12.2% over the year to November, according to the latest MBIE Jobs Online report. Job ads rose in six out of eight industry groups over the month. The biggest increases were in construction and engineering and healthcare and medical. The only fall was in the IT industry.

In New York, the UST 10yr yield has slipped overnight to 2.55%.

The US benchmark oil price has slipped at little to US$52.50 a barrel, while the Brent benchmark is stable at US$54.50. The slippage is due to a surprising rise in American crude oil inventories.

The gold price is unchanged at US$1,130/oz.

The New Zealand dollar has fallen against a seriously strengthening greenback and is now at just 69 USc. On the cross rates it is stable at 95.3 AU¢, and 66.2 euro cents. The TWI-5 is down to 75.8.

The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »

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32 Comments

Commodity Prices
"New Zealanders will soon be paying more for their milk after sharp price gains on world commodities markets"
Anybody recall milk prices going down when global commodity prices fell sharply?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…

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Retail Milk prices DID NOT GO DOWN when the commodity price fell , and this was because of the structure of our tiny market .

Demand for liquid milk is probably quite inelastic, we really only need it for tea, coffee, breakfast cereal and some desserts so demand will not likely increase if the price drops , but I suspect it could become very elastic if the price goes up , because we may buy and drink less .

You may also just find people importing UHT milk at about 70 cents a Litre from the EU , and that will stick a large cracker up Fontera's posterior

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Looks like a NZ Xmas for the North Pole...

Santa's elves may be a bit warm this week during final Christmas preparations.

Temperatures at the North Pole are forecast to soar into the 20s Thursday. That might not sound balmy, but it's roughly 50 degrees above average at what's typically an unimaginably cold, pitch-black point in mid-winter.

Scientists believe man-made global warming is also a factor in the bizarre Arctic weather.

"The loss of the sea ice, the increased melting of the Greenland Ice Sheet, the thawing of permafrost, the changes in the weather patterns, the rising sea level — it's all consistent with our expectations for the response of the climate system to increases in greenhouse gases," Rutgers University atmospheric scientist Jennifer Francis told LiveScience.

"What's not expected is how fast it's been happening," she added.

http://www.usatoday.com/story/weather/2016/12/21/north-pole-record-warm…

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Well you only have to look at the air pollution index to realize what's very much contributing to global warming.
Air Pollution in World: Real-time Air Quality Index Visual Map
http://aqicn.org/map/world/#@g/3.2783/7.5586/2z

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Latest I heard from friends in Norway, fantastic winter with masses of snow. They're right into cross country skiing so hating work at the moment.

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Global warming alters weather patterns ... I read somewhere Europe is due to get colder as a rule as trade winds shift but globe warms, ice caps decrease... ie the misconception is that everywhere becomes the med

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As Arctic/Greenland melts; gulf stream slows... Europe becomes like Canada.
Google all you want. Plenty of respected sites to look at for more background.

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@tony,
I have an extract from a paper by James Hansen,published in Atmospheric Chemistry and Physics in which he said; "We conclude that light freshwater added to upper layers of the ocean is already beginning to shut down North Atlantic Deep Water formation".
However, the long time polar researcher Peter Wadhams,in his very recent book, "A Farewell to Ice,a Report from the Arctic",believes that overall, this will only slow down the effects of global warming in that part of the world. He is convinced that summer sea ice in the Arctic is in irreversible decline and will vanish withing the next few years. he is also extremely concerned by the possibility of large scale methane release,not so much from permafrost,but from shallow sea areas such as the East Siberian Sea. This extends to some 2.10m sq.ks and much of it is less than 40 metres deep. largemethane plumes are already being observed there.

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Large scale methane release, which is 20-30 times as potent as carbon dioxide, will trigger runaway global heating and we are cooked, literally.

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How can that be possible?! The NY times was telling us 2 years ago it was the end of snow. The UAE CRU was telling us in 2000 snow would be a rare and exciting event and children weren't going to know what snow is... Amazing all the crackpot theories now why there is so much snow.

http://mobile.nytimes.com/2014/02/08/opinion/sunday/the-end-of-snow.html

NH snow extent has been invreasing for the past 50 years.

http://climate.rutgers.edu/snowcover/chart_seasonal.php?ui_set=nhland&u…

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Look up Rossby Waves, the slowing and southern dipping of the N. Hemisphere jet stream (due to Arctic heating) that brings cold Arctic blasts.

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Yeah it hasn't been this warm in the Arctic since 1964, or 1966 or 1967... activist "journalists"are so lazy/disingenuous.

Clickbait media at its best. Amazing how many people take the bait.

http://ocean.dmi.dk/arctic/meant80n.uk.php

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The Chinese galvanised steel sheet is a joke product, why was it even allowed into the country?
A builder friend told me of a re-roof that was done in Rawene, Hokianga (upper harbour not coastal) using the Chinese product. Rust streaks were visible within a couple of months followed by extensive deep corrosion within a year.
I would suggest we are not "discriminating" enough.

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You need to find out from your builder friend who the supplier was and then "name them"

Then

If your builder friend was the contractor who did the job he should get the supplier to come and fix it

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The builder friend was not involved directly. It was a local roofing company that offered the Chinese roofing as a cheaper option which was accepted. They are as much a victim I guess as they were led to believe that this was a broadly comparable product to the NZ zincalume. I don't know the final outcome of the dispute is.
There seems to be a lot of highly suspect product coming in from that part of the world - the dodgy steel used on the Waikato Expressway for example. I assumed that there were certain standards that had to be met for imported product - same as the local stuff; apparently not.
Watch out for farmed prawns and fish as well - ex our "Red Friends" and chocka with antibiotics with the potential to contribute to a catastrophic, untreatable global pandemic.
https://www.bloomberg.com/news/features/2016-12-15/how-antibiotic-taint…

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Priced for perfection?

Fed Blurs Intentions as Dots Drift Away From Economic Forecasts

Fed Chairman Janet Yellen had this to say yesterday:

The short version of what I have to say is that while I expect workers will continue to face some challenges in the coming years, I believe, for two reasons, that the job prospects and career opportunities for new graduates at this time are very good. First, after years of a slow economic recovery, you are entering the strongest job market in nearly a decade. The unemployment rate, at 4.6 percent, is near what it was before the recession. This is a level that has been associated with good job opportunities. (my emphasis) Read more

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According to a new report from the Government Accountability Office, the federal government is increasingly garnishing Social Security benefits to help cover student loans payments owed by baby boomers. According the Wall Street Journal, a total of $1.1 billion has been garnished since 2001 with $171 million being collected in 2015 alone. Read more

And yet:

It is an increasingly unpopular fighter plane that can go up in flames due to a loose bracket, and with the $1.45 trillion the US is expected to pour into the F-35 program over the course of its life, America could forgive every penny of its crippling student loan debt. Read more

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https://www.bloomberg.com/news/videos/2016-12-21/how-trump-and-the-fed-…
The hype over the Trump presidency will soon be replaced with reality....

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China unhappy with us? Well that's funny, we're unhappy with China. If they're so unhappy why don't they stop buying up our property and businesses?

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This is why; they've polluted their own cities to the point where they can no longer live there. I guess we have this to look forward to.

BBC article: China smog: "The air is so polluted it's darkened the sky"
http://www.bbc.com/news/world-asia-china-34972375

BBC article: Health of 'young and old' hit by China smog
http://www.bbc.com/news/world-asia-china-38389334

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How does one get away from a growing list of public NZ outrages such as this?

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They have polluted their cities to provide us with stuff.... and we are working hard to pollute our place to try and buy more stuff ... otherwise everyone goes "broke". ... hmmm kinda like biting the hand ... Arent humans awesome.
The sooner the financial system collapses, the greater the chance we wont drive a complete mass extinction, but chances are its too late.... and then you add in Nuclear spend fuel ponds ...

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Yeah - exactly...how does "if you don't like it leave" sound...personally I like it.

This country is the weak doormat of the pacific - come in, take what you want and cr@p all over us...and then we'll invite you back for more.

We'll rue the day we ever tied ourselves to them via the last 2 governments...

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Indeed. The last time a small pacific nation took the cash and gave large foreign nationals so much carte blanche, this resulted.

http://basementgeographer.com/what-to-do-about-nauru/

http://www.gettyimages.co.nz/photos/nauru-refugees-moonscape?excludenud…

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Was the collapsed Featherston St traffic light pole constructed using Chinese steel?

http://www.stuff.co.nz/dominion-post/news/87809842/traffic-lights-fall-…

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China is a bully. Best not to play with bullies.

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And bullies tend to throw their toys out of the cot. We could loose 30% of our export trade over night. We can't afford that so we should be politely stepping back from them and putting all our effort into diversifying our trading partners.

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Yes, our friends in North America and Europe are still to be trusted. Generally speaking, they still produce quality products. Made in USA is still one of my favourites. Can't remember ever having a problem with their products.
When I was a kid, Made In Hong Kong were bywords for crap. Not much has changed except now most of it comes from the Mainland. Sometimes, we do get what we pay for.

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I reckon Hedge Funds are like P addicts , but their drug is money , and they are prepared to rip and bust to get a high . They know the risks and the possible consequences , but they come back all the time .

They got what they deserved when VW and Porsche played them for a few Billion a couple of years ago .

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Did anyone see the news about the embargo, by all the other signatory countries, of some USA products [cars etc.] if it pulls out of Paris Climate deal "as it's just too important"... Please post link if anyone finds it.

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