A review of things you need to know before you go home Wednesday; BNZ cuts home loan rate, bitcoin hits stratosphere, LVR limits cut, OIO to be tougher on farmland, UDC faces junk rating, swaps and NZD slip

The A380 was a huge bet on hub-and-spoke. The world has gone point-to-point. Who wants a massive white elephant they can't fill with bums?

(Thx for the link!)

The Reserve Bank’s recent hypothetical borrower exercise, which asked banks to calculate the maximum amount that they would lend to a range of hypothetical borrowers. Both buyer types are couples with a combined gross salary income of $120,000 and declared monthly expenses of $1,333. The investors are assumed to have a potential rental income of $27,000. This repeated an exercise that was conducted in 2014. The 2017 results suggest that maximum borrowing amounts have declined by around 5-10 percent since 2014. More than three-quarters of banks reported that household credit conditions are tighter now than in the previous three years.

Monthly expense of $1,333 ?! Good luck with that. Three hundred bucks a week to fuel the car(s), put food on the table, pay the rates and insurance and God knows what else we all have to outlay just to live...and $120k is about $30k above the median household income isn't it? So why use that?
Oh, I know! The RBNZ live in La-la Land, don't they? That's where their figures come from.....

Have a look at the working for families table and see what a low income family with 6 kids can receive a week.

https://www.workingforfamilies.govt.nz/tax-credits/payment-table.html

Found it: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11944806

Rent for multiple people, transport, electricity, water and other bills all need to be paid before food so in part her story makes a bit of sense, (especially in the cities with the most work and access). However even the food banks are stretched in major areas. Often I see families and mum's who end up going without themselves to get what their kids need. (That being said I normally see the ones who end up by themselves or out of work through medical injuries or abuse. They did not plan to end up in that position and sometimes not having children was not an option available to them.)

Each case is different so I know a variety of others had different reasons, medical status and abilities. MS and other diseases are common as well as other genetic disabilities which can start & get diagnosed later in life out of the blue. Went to a medical conference and even people as late as 45-50 were finding out they would be unable to walk without aid in 5-10years and work would be difficult if not impossible in some sectors (and they were lucky they got that much warning and it started later on). Yet the calculations for everyone and cost of living is kept roughly the same and incredibly low (regardless that many have increased transport, medical and home care payments they need to make just to get by). Often even pensions are treated as if everyone does not use the private rental market. Hence the lack of state & council housing is an issue, (as the housing is almost rent controlled, managed, usually able to be set up for mobility aids, easier for those trying to start from scratch in poverty, close to work and medical services etc).

$1333 per month seems to only account for people without children (and not needing daycare, rare with both parents working), not including costs to enable healthcare for the adults, not including costs of transport, not including costs for main accommodation (as if they were rent and mortgage free), or even not including costs for bills... Where on earth do they get their numbers from, WINZ and pension rates or their live in unmarried sons?