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A review of things you need to know before you go home Thursday; lower personal loan rate, fraud cases, ANZ NZ's record profits, unmatched by 'contribution'; tiny trade deficit, mini-budget?, swaps and NZD stable

A review of things you need to know before you go home Thursday; lower personal loan rate, fraud cases, ANZ NZ's record profits, unmatched by 'contribution'; tiny trade deficit, mini-budget?, swaps and NZD stable

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

MORTGAGE RATE CHANGES
No changes to report here today. But we can report that Heartland Bank has reduced its personal loan rates significantly. They now range from 9.75% to 11.95% depending on client financials. That is down from the range of 9.95% to 29.95%. It makes the new Heartland Bank offer market-leading from any bank.

DEPOSIT RATE CHANGES
No changes here so far today. But we did miss reporting earlier that NZCU Baywide has reduced its 1 year TD rate to 3.90%, a -10 bps adjustment.

$1 MLN FRAUD EARNS 4 YRS JAIL
A South Auckland “tax agent” without any accounting qualifications, Pranesh Nandan, a migrant from Fiji, has been sentenced to four years in prison for tax fraud and theft from his clients. Over a three-year period he filed 68 false GST returns on behalf of his clients and entities he controlled. The returns contained significantly inflated expenses, resulting in refunds of $652,064 being paid into accounts he controlled. Nandan also spent on himself another $285,306 which had been deposited into his firm's bank accounts by clients to meet their tax obligations. The total amount of money defrauded from Inland Revenue and his clients was $937,370.

MORE FRAUD ALLEGED
The FMA has filed criminal charges against Steven Robertson in the Auckland District Court under the Crimes Act 1961. He is accused of taking investors' money and faces 47 charges. FMA charges he told his clients he would invest for them, and withdrew money from their credit card accounts without them knowing.

TINY GOODS TRADE DEFICIT
The September trade deficit came in a little more than was expected, but -17.7% less than September 2016. On a year to September basis, exports were +5.3% higher, imports were +4.1% higher and the goods deficit was -$2.9 bln, its lowest in the last three years. It is now down below -1.1% of GDP.

TAKING MORE FROM CLIENTS, CONTRIBUTING LESS TO OUR ECONOMY
ANZ NZ released some preliminary, high-level details of their annual result to September today. You can read Gareth Vaughan's article here. The profit was a record high. What is special about bank profits is that they are far higher than their payrolls, unusual for just about any of their clients. ANZ NZ's profits were up +15.4% to $1.78 bln while wages and salaries paid were down -1.4% to $800 mln. No word yet on the dividend they are transferring to Australia, but in the previous year it was $1.63 bln. ANZ supplied some tantalisingly brief details on what they "contributed to the economy" in 2016/17. But they didn't compare with previous years; we have, and that shows a decline in their "contribution".

GETTING ON WITH CHANGE
The new Prime Minister has signaled that a "mini-budget is possible before Christmas".

WHOLESALE RATES STABLE
Swap rates are up +1 bps today for all terms 2 to 7 years, and +2 bps for 10 years. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR LITTLE CHANGED
The NZ dollar is little changed today, trading at 68.8 USc. On the cross rates we are at 89.3 AUc and lower at 58.2 euro cents. The TWI-5 is still about 71.6. The bitcoin price is now up to US$5,718, a +5.3% gain on the day.

You can now see an animation of this chart. Click on it, or click here.

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6 Comments

One aspect to watch in the mini-budget will be labour relations. The Fair Pay, industry-wide agreements will have to be legislated for, and the economic effects will be Interesting. Run a thread on which 'industries' (defined just how?) will be first for the GUBO treatment.....

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Significant parts of the Sydney apartment market and the associated apartment land markets have cracked and are now suffering serious falls.

As readers know I have been warning the nation that our banking industry is undertaking a property credit squeeze on a scale not seen for decades. For the most part the regulators and the bankers are inexperienced and are operating in silos so have not understood the combined power of the weapons they are using. Many will be shocked at the results of their actions and by what is to come. In putting numbers to the extent of the fall readers need to understand that the cracking process has been sudden and parts of the Sydney apartment market and other Sydney residential property markets have yet to receive the impact. Many will not fall as much as the big Sydney apartment estate markets, which also led the rise.

If you want a headline figure, apartments sold as used apartments in the big Sydney apartment estates have fallen by at least 20 per cent. The fall rate for individual sales can rise to 25 per cent.

http://www.theaustralian.com.au/business/opinion/robert-gottliebsen/syd…

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^paywall :(

So the Australian housing market has finally popped, lets hope the OZ/NZ banks don't go down with it...

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That is supposedly a view of a QBE Housing Outlook report. Actually, the report itself is nowhere near as sensational as that reporter makes it. Read the original report. I was going to report the Gottliebsen view, but when I read the report, I realised it didn't quite match.

Here is a less sensational, more reasoned review if you don't want to read the whole thing. It's still sceptical, just not tabloid.

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Yes David. Gotti is part of the old guard and possibly been told to spice his output up (he does work for MSM after all). Then again, the QBE's forward looking report is quite different from this.

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Australian banks under the gun for rate rigging. Some/one are admitting their misconduct.
Also individual execs may be liable for misconduct in future.
http://www.smh.com.au/business/banking-and-finance/asic-tells-treasurer…

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