A review of things you need to know before you go home on Tuesday; TSB cuts mortgage and term deposit rates; Zurich to capture 19% of Australia's life insurance market; people take out mortgages to buy bitcoin; Manuka honey gets a definition

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

MORTGAGE RATE CHANGES
TSB has reduced its 1 year special rate to 4.49% from 4.55%. It has also cut its 2 year special rate to 4.64% from 4.69%.

TERM DEPOSIT RATE CHANGES
TSB has cut its 2 year term deposit rate to 3.85% from 4%.

ZURICH TO BUY ANZ’S AUST LIFE INSURANCE BUSINESS
ANZ has agreed to sell its Australian life insurance business, OnePath Life, to Zurich for A$2.85 billion. The deal will see Zurich sell its products through the bank’s channels for at least 20 years. It will see Zurich become the largest life insurer in Australia, with a 19% share of the market. The sale, which is expected to be completed by the end of 2018, won’t affect ANZ’s New Zealand life insurance business.  

BITCOIN MANIA
There are reports of people in the US taking out mortgages to buy bitcoin. Closer to home, a developer is selling a Marlborough Sounds section for bitcoin. The developer is reluctant to put a price on the section as the currency is fluctuating, but says there are a lot of people in cryptocurrency who may be looking to change their bitcoin into hard assets. If a sale was to eventuate, it would be the first bitcoin real estate transaction in New Zealand.

MANUKA HONEY DEFINITION RELEASED TO PROTECT TRADE
The Ministry for Primary Industries has released a definition for Manuka honey to safeguard the product’s value and reputation. Agriculture Minister Damien O’Connor says: “Our trade partners and consumers in many countries want to know they are getting the real deal and this definition will provide them that assurance. If we didn’t introduce this standard then other countries may have forced one on us.’’

NEW BOVIS FINDINGS
The Ministry for Primary Industries has identified four new properties with the bacterial cattle disease, Mycoplasma bovis, and suspects another property’s been hit too. One of the properties is in the Hastings district, three are within a farming enterprise in Winton, and the suspected property is near Ashburton.

HARMONEY SEEING RISE IN SME LOANS
The number of borrowers after loans for “business cashflow” purposes from Haromeny is on the up. Now making up 15% of all the peer-to-peer lender’s loan applications, “business cashflow” is the fifth most common reason borrowers are seeking loans. The most common reason remains debt consolidation, followed by home improvements, "other" and holiday expenses. Harmoney estimates $100 million will be loaned for business purposes via its website within the next year. Currently, the average loan amount for business cashflow via Harmoney is $25,000.

GUEST NIGHTS UP EVERYWHERE BUT AUCKLAND
Good weather, an extended ski season, and the timing of school holidays have seen national guest nights increase by 4.8% in October, compared to October last year. Auckland was the only region in the country to experience a fall in guest nights from a high last October.

A NOTE TO HANOVER INVESTORS
Eligible investors in the Hanover settlement, who haven’t yet made a claim for their money, are being encouraged to do so before February 16. Deloitte says there are still 600 eligible investors who have either returned incomplete information or are yet to make a claim. Around 85% of eligible investors have received their money.

WHOLESALE RATES UP SLIGHTLY
Swap rates were marginally higher today, with the 2 yr to 7 yr rates up +1 bp and the 1 yr and 10 yr unchanged. The 90 day bank bill rate has made a new record low of 1.88%.

NZ DOLLAR UP
The NZ dollar has risen from this time yesterday to US69.2c. On the cross rates it is also higher at AU91.9c and 58.8 euro cents. This puts the TWI-5 at 72.4. The bitcoin price is at US$16,818.

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End of day NY time
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16 Comments

Auckland hotel rates at $300 - $400+. Very expensive city to stay.
In addition, hotels charge for wifi..

Kiwis can’t afford to visit Auckland, in addition to being unable to afford to buy a house there.

Fess up MortgageBelt, what have you been doing on the WiFi?

Shane jones stole the password?

'The lucky country' inhabitants in some locations have to steal food to survive.

Children are breaking into houses to steal food because they are not being fed at home and many have fallen through the gaps of child protective services, according to a new study. Read more

A nation too in debt to feed it's own?

Buying Bitcoin and putting it on the house. Oh dear, oh dear.

Another mania that will eventually end badly.

It's worse than that a common search term is how to buy bitcoin on credit card. Bitcoin is going all 1929 again.

I think most sensible people know it’s a really bad long term investment but want to get in and hope to sell before it goes bang. I can see some sense in that- but it is a massive gamble. It might go bang tomorrow. It could be worth zero tomorrow.

Oh dear , oh dearie me ... ye of little faith ... this time is different ... Bitcoin is just one of the 1200 cryptocurrencies currently available ... this is the brave new world ...

... you guys need to wake up and smell the tulips ....

I thought we were supposed to diversify our investments.

US punters taking out mortgages to buy Bitcoin

Bitcoin has now gone mainstream on CBOE Futures Exchange (Chicago Board Options Exchange)

A Futures Contract is a cheap economical way of gaining exposure to Bitcoin's volatility without having to outlay huge sums in purchasing what is known in the trade as the "underlying" or "physical" (a bit of a misnomer as it's a virtual or digital crypto-currency)

With the unprecedented interest in Bitcoin the CBOE has legitimised the cryptocurrency by establishing a Futures Contract over the underlying physical itself. CBOE is operated by "designated primary market makers" who will establish the market each day by standing in the market with guaranteed buys and sells and will cover their exposure at day end by buying or selling the physical. The extraordinary interest in the Futures Contract suggests the market-making will increase demand for the physical

Bitcoin surges in first day of futures trading
Bitcoin contract futures opened at US$15,000 (NZ$21,698) and 890 contracts were traded in the first 15 minutes on Sunday evening, according to the Chicago-based CBOE. The number of contracts had grown to 3200 by around noon on Monday. CBOE reported two trading halts overnight of CBOE Bitcoin Futures (XBT) due to heavy demand. One halt lasted two minutes and one for five minutes, according to a Cboe spokesperson. There were no trading halts on Monday
https://www.stuff.co.nz/business/world/99762710/bitcoin-surges-in-first-...

Bitcoin enjoys bumper futures start
Dealers said initial volumes beat expectations, while traffic on Cboe's website was so strong it caused outages.
http://www.afr.com/markets/currencies/bitcoin-futures-start-with-a-bang-...

Some of the very very recent exchange crashes and code based flaws have lead to millions unable to access or even see their funds.

NiceHash has been recently hacked. est $70mil

Coinbase, a leading bitcoin exchange that went down last week for many hours, has warned that customers may be unable to get their money out quickly in the event of a crash in the cryptocurrency's price. Writing in a blog post last week, Coinbase's co-founder and chief executive Brian Armstrong, said despite "sizeable and ongoing" increases in the firm's technical infrastructure and engineering staff, access to Coinbase services could become "degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for period of time," he said.

Bitfinex also dropped access to transfer bitcoin in quite a noisy failure. Users tried to "swap" to Litecoin to be able to make transfers of their money.

Not to mention:
"The first, and most fundamental is that blockchain technology is inherently non-scalable. It is, effectively an ultra-redundant database system, operating on diverse hardware, in diverse regions, and which has a monotonically growing, non-prunable dataset. It is estimated that there are around 100k nodes in the bitcoin network maintaining a copy of the dataset, and participating in peer-to-peer replication. The total quantity of storage required for each database entry and the network traffic to replicate it are non-negligible."
"The problem is that demand for transactions exceeds the hard limit. As a result, there is a queue of pending transactions, which currently stands at about 200 MB (or about 30 hours), with transactions removed from the queue in order of the amount they wish to pay as fees. This has led to spiralling fees as users try to outbid each other, in order to have their transactions accepted. Transactions with low fees have recently been timing out after 2 weeks in the queue and have been discarded unprocessed."

So database copies with a slower transaction rate on multiple servers (usp being they operate using encryption). However even old tech uses server pools to be scalable and handle under load often with the same encryption. The difference being the cryptocurrency data access is more readily available and more open. So you can see the amount and transaction history for everyone's wallets (you just may have difficulties in identifying the small fry).

Bitgo attempted to shove an "upgrade" down the communities throat in the form of segwit2x that ultimately had a bug that ended up completely freezing the chain. Not to mention the multisignature access still saw clients loose millions due to hacking.

But wait it gets better because if Bitcoin cannot scale neither can Ethereum. With crypto kitty breeding holding up everyone's transactions and a bug introduced to the code which froze every account using a multi signature with no way yet to restore the lost $169mil (Parity is still looking at it).

It is more shaming that the drive in just speculators alone have hamstrung the technology and it cannot scale to handle occasional investor transactions. It is so far away from being able to handle the transaction load of actual payments that companies offering Bitcoin have been pulling out, (as the immense fees, and volatility caused several payment issues for the companies).

There still are several coding political splits and infighting which have forked currencies, created incompatibilities and slowed down the actual development for scalability.

It has been shocking. Plus since banks, financial investment houses and large corporates also want their own slice the tech is an unregulated field day which is far more corrupt than the environment many bitcoin purists were trying to escape.

Then there is the volatility... read a nice analogy for it the other day:
"My daughter asked me to buy her $10.00 in bitcoin, so I asked her why she wanted $12.38 in bitcoin. She said she needed $7.92 in bitcoin so that she could subscribe to a podcast. I told her $19.52 was way too much for a podcast subscription. She stormed off upset that I wouldn't give her the $11.41 in bitcoin that she wanted. At least her temper tantrum saved the $24.68 transaction fee."

CFE is waiving all of its transaction fees for XBT futures in December 2017. Opportunities to get in for the no fees bonus still available, one month only. Subject to terms and conditions... http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures

Commenters on this site were telling me bitcoin is safer than any fiat currency like the NZD or USD - they got a lot of likes too. So I imagine those “investors” may have done something similar.
But it all smells a bit too familiar to me. That urge to not miss out like you did last year...

Well it is being gamed and knowingly, (it is a system which is way too easy to game). The volatility is high and the transactions are slow. But like with surfing if you can ride a wave and are not afraid of a wipeout then why not. There are quite a few to choose from https://coinmarketcap.com/all/views/all/ Pick the exchanges very, very, very carefully. Inspect them as carefully as a second wife who you think may be cheating on you and about to take most your assets. Good news though UBS to Launch Live Ethereum Platform with Barclays, Credit Suisse and More... https://www.coindesk.com/ubs-launch-live-ethereum-platform-barclays-cred... so at least there is more resources going into resolving the kitty issues with ether. And the few developers working on the lightning transaction upgrade for Bitcoin (essentially a loose transaction level system) have a beta test so trials may be seen in a couple months and bugs ironed out in a year or more. (Hopefully they get more devs before then 12 is too small to test bad actors and edge cases).

Ostrich’s would be a safer bet than Bitcoin long Term!

(Deutsche Bank): "We Are Almost At The Point Beyond Which There Will Be No More Bubbles". At some point, the bubble becomes too big and cannot be subsumed by a bigger bubble – the damage of its burst would become irreparable -- and we believe that moment is now. Just look where the status quo got you: a world where the markets have to close their eyes and pretend they can exist forever in the artificial, central-bank created "permanent state of exception - which, thankfully, is impossible. "

http://www.zerohedge.com/news/2017-12-11/deutsche-we-are-almost-point-be...