Trump inches closer to signing tax bill, bitcoin doesn't pose threat to US banking system, China keeping proactive fiscal and neutral monetary policy stance, set back for Uber, NZ dollar at US69.84c

Here's our summary of key events from overnight that affect New Zealand, with news the much hyped and criticised US tax bill is almost ready for President Donald Trump to sign.

The Senate has approved the bill but had to send it back to the House, where it had already been passed, for another vote due to a procedural botch-up that's not expected to change the outcome. The controversial Republican tax bill, touted as the biggest overhaul of the US tax code in 30 years, will be the Republicans first major legislative victory since Trump moved into the White House in January. Once the House repasses it, the bill will require Trump's signature, something he will undoubtedly enjoy providing.

Off the back of the tax bill news, US sharemarkets were slightly lower and Treasury yields rose to a nine-month high. In New York the yield on 10-year Treasury Bonds gained two basis points to 2.48%.

Elsewhere in the US, Joseph Otting, speaking in his first formal press briefing since being sworn in to lead the Office of the Comptroller of the Currency, told reporters the regulator recently conducted an informal poll of banks to gauge their exposure to bitcoin. Otting said this showed most banks have shunned bitcoin meaning the virtual currency doesn't pose a threat to the stability of the US banking system.

Meanwhile, Coindesk suggests the bitcoin price appears "topped out," given it's trading around US$17,000, down from the record high of US$19,783 on December 17.

The US National Association of Realtors said existing home sales rose 5.6% to a seasonally adjusted annual rate of 5.81 million last month. This was the highest level of sales since December 2006. 

The South China Morning Post reports that the senior members of China’s Communist Party have just concluded a three-day, closed-door meeting on where they think the Chinese economy should head. Key points include maintaining a “proactive” fiscal and a neutral monetary policy stance, ruling out any stimulus or monetary easing, and keeping the yuan’s exchange rate largely stable. Additionally the plan is to continue cleaning up the chaotic Chinese financial sector, and trying to restore blue skies by cutting pollutants dramatically by 2020. China's government wants to encourage investors to invest in environmental rehabilitation.

And according to the Chinese Academy of Social Sciences, China’s gross domestic product will grow 6.7% in 2018, after 6.8% growth this year.

Meanwhile in a move expected to impact on other "gig-economy" companies such as Airbnb, the European Union Court of Justice has ruled that Uber is a transport company rather than a digital service provider. Bloomberg reports this is the first definitive finding that Uber must be regulated by transport authorities because connecting people via an app to drivers forms an integral part of a transport service. The Court rejected Uber’s argument that such services are purely digital, and this could fuel similar scrutiny of other gig-economy firms.

In Australia Fairfax is reporting that the cost of the "Snowy 2.0" energy expansion project has blown out by at least A$1 billion to A$3 billion. Prime Minister Malcolm Turnbull has said the project will future-proof Australia's electricity grid. 

For those who enjoy testosterone fuelled trader talk, Australia's federal court has released a series of transcripts of taped conversations from the Australian Securities and Investments Commission's case against Westpac over alleged manipulation of the bank bill swap rate market. It features a trader known as Colin "the Rat" Roden.

This morning the Kiwi dollar is at US69.84 cents, AU91.02c, and against the euro it's at 58.78 euro cents.  

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when you have non investing type people telling you to jump on bitcoin and the profit they have made, its time to take notice and be wary

When a co-founder of is selling his entire holdings, the music might have just stopped...

Bitcoin certainly has its drawbacks. Its no way near as liquid as stocks/shares but is considerably more liquid than property.
We cashed in all our bitcoin a week or so ago and it will take us another month to get out and receive the full balance in a fiat currency in an NZ bank account. Fees aren't unreasonable really, but it can take 1-2 weeks to actually cash bitcoin, and get it out of the exchange. The exchanges are very slow because of the incredibly high traffic. If you have a considerable amount to cash it can take months, as there is a limit to how much you can cash in a 30 day period, which is the cause of our delay.

We have kept some bitcoin gold and that is going up at the moment.

Ginger ninja, why do you need property to be liquid?
Why would you need to sell when rental return are guaranteed and capital gains are an added bonus.
Bitcoin has got no such guarantee and is a total gamble and it will come a gutser!

But rental returns aren't guaranteed - all it takes is the person who is renting the property to not pay ( for what ever reason) or the property to stay vacant and there is no rental return. Neither are capital gains guaranteed. Additionally you most likely didn't read how Gingerninja obtained her Bitcoin - I don't believe it was as an investment but as a bit of a gamble a few years ago.

THE MAN 2, is still on a recruitment drive for johnny's to keep the bubble ponzi alive!

"Hearayee folks, step right up, I have here a scheme you can double ya money - Hearayee"

I am a bit puzzled by some of his comments - it does seem he is scared of some of the other investment options out there - perhaps he runs property investment seminars and things aren't going to well at the moment.


"rental return are guaranteed" ranks high among the many ridiculous comments you have made over the year.

I trust you will maintain the same 'high' standard in 2018,to provide us all with some much needed laughter,in what I expect to be a more difficult year,economically.

Misleading summary. That guy founded a website that talks about bitcoin. He is not a founder of bitcoin itself.

He's sold his bitcoin and his website is now promoting an alternative 'bitcoin cash'.

It's like saying Gareth Vaughan invented iinterest payments.

dtcarter, thanks for spotting that, I stand corrected - comment now altered :)

I see the US corporate tax rate is set to be cut from 35% down to 21%. That's a huge cut in anyone's book. This is what you get with an extremist White House. And the Republican House seems happy to go along with it.

In March 2017, The Institution on Taxation and Economic Policy (ITEP) released its latest report examining the corporate tax filings for Fortune 500 companies. It looked at 258 of the companies which had been "consistently profitable" from 2008 to 2015. The report concluded that these companies were collectively paying far less than the statutory 35% federal corporate tax rate – in fact the average effective tax rate was 21.2%. According to the ITEP report. Read more

It will be even less now.

Its not an extremist whitehouse - its extreme monetary policy time. Has been since 08.
The basic idea behind this is really run even bigger Govt deficits and try and get some spending / wage growth going .. a last ditch roll of kick the can capitalism. What choice is there.
The US is in the position to do it ... other countries would soon see their currency fall to bits.

Americans put it all on the House...but nowhere as much as we do. The law of averages

Poor bastards are nowhere as rich as us. ..Poor Bastards. They cannot compete. We is going through the roof.

Plus we are bigger, plus we are keeping our State Houses, we are on a roll. Gonna build like never before.

No small wonders for us, no we think Big...We is rich as all get out. No debt, no such luck. Poor Yanks.

Article mentions cost increased from 2b to 3b, 50%. A 1 to 3 200% blowout felt a little big, even for Australians.

Australia, particularly SA and VIC, are under the pump electron-wise. SA blew up Northern power station, VIC let Hazelwood die. Both coal-fired, baseload stations. As real electrical engineers know, a distributed AC grid is easily upset, and the introduction of significant amounts of unreliables (solar, wind) into a grid generation mix causes wild swings in the generation vs demand equation, because neither of these sources can be 'turned up' like spinning reserve powered by coal, gas, diesel or nuclear. Australia is a crash-test-dummy for the 'high proportion of non-dispatchable power' configuration, and so far it hasn't panned out well. Jo Nova keeps tabs on it all.

Germany's Energiewende is no better, the Grey Lady adjudges....

A de facto class system has emerged, saddling a group of have-nots with higher electricity bills that help subsidize the installation of solar panels and wind turbines elsewhere.

Germany has spent an estimated 189 billion euros, or about $222 billion, since 2000 on renewable energy subsidies. But emissions have been stuck at roughly 2009 levels, and rose last year, as coal-fired plants fill a void left by Germany’s decision to abandon nuclear power. That has raised questions — and anger — over a program meant to make the country’s power sector greener.

And the kicker for Germany is that the 'coal' is mostly Lignite......

Ah, the joys of the EU lunatic asylum. It is sometimes hard to comprehend but NZ is indeed an island of sanity and good sense.

Exactly. Maybe Brexit isn't such an insane idea after all. NZ has stood on its own for decades and can make the big decisions without having to consult all the other pigs at the trough.

Brexit makes perfect sense to me. I fail to understand why kiwis in general think the EU is a good thing when they would think making NZ into a US, Chinese or even Aussie colony in a very different light. The EU imperialists inflicted 25% unemployment on their colonies in order to save the French and German banks, to me that is pretty much unforgiveable. It is not so very different from Stalin starving the Ukraine into line, only with fewer people dying early.

"Uber’s argument that such services are purely digital"

Absurb. Is broadcast TV no longer a TV broadcasting service because we switched over to digital broadcasting a few years back?

Do the banks no longer provide a banking service, since i now access my account via an app?

Should the government get rid of all existing sector specific regulations and introduce a new 'digital' regulator?

If Uber is a transporter , is Trade me a retailer ?

yes good question. Is the herald a retailer because it has classifieds, or an employer because it has job ads?

There's a line there somewhere, and i think it's clear to the user that trademe is an online market place, while uber is a transport service. When you get an uber you don't look at the sellers reputation, ask questions, compare products, and then make a purchase. You just press a button that says 'get me a taxi now'.

If uber is a market place and not a transport service, it would be trivial for existing taxi companies to restructure their contracts with drivers to also avoid transport service regulations. Nothing at all to do with being 'digital'. Ultimately in both cases you get in a physical car with a physical driver, neither of which are simply transistor gates that are either open or closed (ones or zeros).

Yes, but, the taxi firms very often have a nice (or nasty, if you pay for it) little cartel going whereby the licensing system tends to restrict the number of taxis. Licenses are often sold for very large sums and the potential for corruption is equally large. The elite EU homo brussellicus thinks cartels are a Good Thing as it gives him and his classmates both income and, most importantly, Power.

As usual the EU judges come to the expected decision and the media dutifully report the party line that all is well and We Know Best.

Taxi firms are a dime a dozen in Europe. Way more competition there than here as usual.

Has Bitcoin topped out ?

One would hope so, for the sake of the Financial World's sanity .

With Bitcoin derivatives that are supposedly floating around there is serious fallout risk when the idiocy of the whole thing crashes back to earth

Who cares if BTC has topped out, I've been riding Verge to the moon these past 3-4 days (circa 600% increase, up 1,100% - yes - 1,100% over 9 days). Nocoiners still to be found in the comments section.

Well done - just one question - do you expect this growth to continue?

That's a big question; growth in Verge? Yes it will continue (but rate will slow) I have already pulled my seed money so anything from now on is gravy... Growth in Bitcoin? I expect that to slow/muddle over the long term, transaction fees are too high. Growth in crypto to continue? I expect it to explode. Its only just starting.

I don't share your confidence - it is purely speculation which relies on the bigger fool theory. In the end it is all a confidence trick - when the confidence goes so will the money. While some will make money - I don't think it has a long term future.

And you are allowed to be a nocoiner.

Having said that all fiat currency is a confidence trick ... the only question is if you have the faith ...

True - that is why I once said property (and that includes fiat currency) is for those who believe in the rule of law , gold is for those that don't.

At least gold is tangible ............ even if it is fundamentally useless for anything other than adornment

Bitcash has just boomed too.. Bitcore didn't have an ICO so has flown under radar, has smart people behind it that have solved problems associated with both bitcoin and bitcash, and is also limited to 21 million - half of which is potentially convertible from bitcoin holders - Started just a few months ago, this is the one to buy now (at 25 nzd) and wait, wait, wait... eventually itl go over $1k like both bitcoin and bitcash - likely much higher once media and the sliw adopters catch on

"We need to find a new equilibrium and reach a stable phase, where we can be profitable – albeit less profitable than before – with a return on capital higher than its cost,"


I gather that under the new US Tax bill , that Corporate Tax rates will be as low as 15% .

Compare that with the UK at between 17 and 19%

And Australia and New Zealand at 30% .

Slight correction, nz corporate tax rate has been 28% since 2011.

UK experiment with lowering the tax rate has been a failure. Unable to get their deficit under control and there has been no increase in business investment or wage growth from the reduced tax rate. Austerity for the masses, windfall gains for the rich.

@dtcarter , I stand corrected , 28%

Bad Robot, rental returns are guaranteed.
We have never ever lost money from tenants not paying, and I can tell you our rental income is pretty substantial.
I appreciate that some people do lose but that is because they are not professional enough don’t do the proper checks in the first place.
Anyone can rent a house out to someone but there are a lot of second rate tenants always trying to have landlords on, but we are on to all their tricks.
4 weeks bond is always held and regular property checks are a necessity.
Capital gains are guaranteed in Chch as well!

I've never died, I must be immortal.

"Capital gains are guaranteed in Chch as well!" can you give us an example THE MAN..devil is in the details

Frazz, history will tell you that.
Property values in Chch are still very reasonable compared to the quality of life in Chch
Buy right and you are guaranteed to benefit!

Who is guaranteeing this? Do we come to you if the market doesn't deliver?

Rents are guaranteed, warranteed, underwritten, promised, approved and endorsed. How do I know? Because I own many properties and sit at home counting money. Please don't take it away.

I don't think you understand how basic logic works.

edit: oops, didn't spot this was another joke account

Please don't confuse me with THE MAN 2 he is a second-rate MAN and second-rate investor - he wouldn't know his chimney from his back door.
Only I am the one who know the magic of infinite property investment. Bow down before me millennial-rent-wallets

rental returns are guaranteed.

A troll that has emptied its bag of tricks and has little creativity for new tricks usually dies and reinvents itself (rehashing the old tricks).

What a clown........ this bloke Otting says " Bitcoin does not pose any risk to the banking system "

Does anyone even remember something called CDO's which were investment flavour of the year in 2007 ?

These were paper "investments' which supposedly transferred risk away from the banks and onto investors , and ensured bank capital adequacy requirements were maintained ............ very clever if you understood it all .

Then a real bunch of gamblers called derivatives traders ( think ...... "Bookies" at Ellerslie on 26 December ) came along and the rest is history

And just correct me here , in 2007 did we not hear experts saying something to the effect that Securitised Mortgage derivatives ( and fancy name containing the word secure for very unsecure derivatives of CDO'S) did not pose any threat to the banking system, supposedly because because the risk had been passed to the investors with derivative holders then taking side bets on the price ............

As an aside , anyone noticed how some shonky investments often have fancy sounding names with words like "secure " or 'preferential debenture " or triple A, " high -grade" or " structured" or "enhanced '

Its a bit like a country which has the words "Democratic" in front of it , be it North Korea , Congo , or East Germany ............ not one of these is or was a functioning democracy.

Bitcoin could be something really amazing , it could also be the biggest fraud this century

That's why banks need to have nice offices, to make it look like they are wealthy. In fact they have very little money of their own.

"As an aside , anyone noticed how some shonky investments often have fancy sounding names with words like 'secure ' or 'preferential debenture' or triple A, 'high -grade' or 'structured' or 'enhanced ' "... Soo much the same as Bitcoin exchanges except they have even less requirements or controls to offer actual financial services & SLAs and not say the existing level of fraud, and service issues. Compare even just one of the NZ exchanges to the tech & financial protections of a standard investment site and the gulf could not be wider. Many NZ exchanges cannot even get their web site to work, and offer such poor to no support the customer loses every time. They lose even more if they supplied credentials to be passed on to someone else. After all you may believe a login and account funds are protected but in reality anyone could set up a convincing site shell. Not many can run one adequately or securely. It is a shame the NZ exchange quality is low and equally that so many others have been hacked or shown to be defrauding customers. Regulations are there for a reason, not as complete protection, but a little protection and some justice.

If we learned anything from the finance company debacle, it should be that to fleece the rubes in New Zealand you need to name your shady enterprise something vaguely evocative of European aristocracy and old money, and put a newsreader or All Black up front.

Register something like 'Hapsburg Securities', get Richie on the blower, buy a bit of air-time for ads harping on old-fashioned values and grandchildren and the good old days, then start shopping for your helicopter.

This looks like the same thing. Give a vague impression of regulation and integrity and security, without actually making any legally actionable statements about it.

Yeah I tend to agree, the same old poor fumbling towards patriotism and tech as the media students normally do with kiwicoin. dasset, cryptopia and nzbcx. Using the old school stereotypes to look like they could handle even the basics of website security and finances yet failing to in such a stunningly bad way.

But hey scaling and security issues are shared amongst all exchanges. It is not like we had the tech, regulations, policies & skills to manage these things decades ago and have advanced beyond the typical exchange setup. It is worrying the number of people who see the bad exchanges as acceptable considering the decades fought for improvements in security, customer protections, technical and financial literacy. Either the media & education system has failed the public or the standards for money management tech these days is lower than dog poop. Since the hacks & issues are just as, if not more common I tend to think it is the former. People are lulled into hype and unable to apply critical thought and cynicism to flashy internet ads which are more pervasive and targeted. A site's css and advertising is more important than it's authentication, SLA and financial policy. A land where due diligence no longer exists because any degree of research is lost amongst many.
We have had the fake news evoking John Key in Bitcoin scandal, we have had NZ Herald and Stuff promoting fabricated stories of NZders who won big with the Bitcoin. There is no place lower to go. Where even the mainstream news is being called up for falsified stories made up for hype all sense of authenticity & impartiality is gone. The ground which the framework is made is shaky and those who seek to milk the blind trust is even worse. The lack of due diligence in the public is perhaps the scariest bit. It means NZ is far easier to scam. We as a public are easy to target & large public contracts show this again and again with NZ taxpayers being taken for multiple pony rides. I really do wish secondary education in basic civics, ethics, law and financial practice was available. Because it seems most do not get this in a home environment and the science classes are not up to scratch in encouraging an independent research mindset either.

If the nation is to become resilient then it must be educated and more so in the practices of investigation than those of blind faith. Any scam artist can easily fool the later; Destiny Church and crypto currency ICOs are an excellent example of that. Yet the less obvious corporate phishing and invoice fraud are just as damaging. You cannot trust anyone from any sector just because they have a particular skillset (or sound like they do), if you are to put money on them then due diligence investigation is a must. Trusting a developer or a distributed groups of developers is even worse. Many of which would actively poison their own well if it meant they could plant the taller flag pole on the land. The in fights alone have lost millions and crippled the industry with wanting to test a non backwards compatible update live. In ways which even basic development houses and server admin laughs at by using an actual trained QA department & a test environment which is scalable.

It is that bad. You might as well give money to someone with a crippling gambling addiction because they can often be a bit more lucky but are even more a target for theft, criminal behaviour and failure.