sign up log in
Want to go ad-free? Find out how, here.

Wall Street drops; global service PMIs rise; China threatens US grain trade; UST 10yr 2.80%; oil down and gold up; NZ$1 = 72.8 USc; TWI-5 = 73.9

Wall Street drops; global service PMIs rise; China threatens US grain trade; UST 10yr 2.80%; oil down and gold up; NZ$1 = 72.8 USc; TWI-5 = 73.9

Here's our summary of key events overnight that affect New Zealand, with news of markets fretting about what the immediate future holds.

Losses on Wall Street are piling up. The S&P 500 on track to log its first -5% pullback from an all-time high in more than a year, as a global selloff in equities continued. The S&P500 is down another -2.2% in late trade today. The day’s weakness was broad based, with a majority of S&P 500 sectors down and European and Asian markets finishing sharply lower. Japanese stocks suffered their biggest one-day drop since November 2016.

Meanwhile, the giant American services sector activity grew sharply to a 12½-year high in January, buoyed by robust growth in new orders, according to one closely-watched survey. But another told the reverse story, sinking to a nine-month low. Take your pick.

The Eurozone survey was also very good but it was the only one where where the factory sector outshone the expanding services sector, and putting them at a 12 year high.

The Chinese services PMI rose to 54.7 last month, up from 53.9 in December. It was the highest reading since October 2010 and matched the figure of May 2012. January’s upturn in the services sector was bolstered by new business growing at its quickest pace in 32 months.

The negative US one feeds into the global survey of the services sector and despite the American drag, globally the services sector grew faster in January; in fact it is now at a 26 month high.

Meanwhile, China is flexing its trade muscles in its standoff with the US Administration. Lets hope US farmers are happy to be the fall-guys. In two separate statements, one announcing the dumping investigation and another regarding subsidies, China’s Ministry of Commerce said “preliminary evidence” revealed unfair practices in the export of US sorghum to China. American subsidies have depressed prices for Chinese growers, giving an unfair advantage to American products they say. Since 2013, the Americans have exported over half of its sorghum production and mainly to China. American subsidy-induced over-production is facing a crisis and the relief valve of exports will close quickly as the world tires of 'America First' policies. Farm state politicians will face a day of reckoning soon.

The UST 10yr yield is down to 2.80% (-5 bps). The Chinese 10yr is at 3.93% (+1 bp) and the New Zealand equivalent is at 3.00% (-1 bp).

Local swap rates are up again with an even steeper yield curve now at +114 bps, its steepest since March 2017.

Gold markets aren't closed yet but the price of gold is up +US$2 to US$1,334 in New York.

Oil prices are lower by more than -US$1 with the US benchmark now over US$64/bbl and the Brent benchmark under US$67.50/bbl.

The Kiwi dollar is down again today against a firming greenback and now at just under 72.8 USc. On the cross rates we are holding at 92 AUc and 58.6 euro cents. That puts the TWI-5 at 73.9 and its general level over the past week.

Cryptocurrencies have fallen sharply again overnight, with bitcoin now at US$6,940. Other crypotos are also slumping. The bitcoin price is its lowest since November 15, 2017. China is blocking access to offshore cryptocurrency platforms.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Daily exchange rates

Select chart tabs

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

128 Comments

Dow down 1100 point and headed towards below the 100 day average

Up
0

Down -1500 now

Total fall 1596

Recovering now

Up
0

I had a look at the VIX in the afternoon and it was up 115%. Apparently everything's fine according to RBNZ.

Up
0

dow futures are showing about another 600 point drop tomorrow, will be interesting to see how low markets go before they turn up again.

good time to buy when those overpriced equities hit your price point, the problem will be now as a lot of trading is done by machines when it does turn the jump up will be just as fast as down

Up
0

The FUD machine is in overdrive.

Buy the dips. Sell when it rebounds. Rinse and repeat.

Up
0

The market is so close to a short clip from caravan palace https://www.youtube.com/watch?v=UbQgXeY_zi4 even the classic quote matches "The time to buy is when there's blood in the streets." (even your own), All the actors to the stage, with even the government as the doorman.

There is a better described version let me check... this one should suffice until I rifle around a bit https://www.youtube.com/watch?v=L7G0OfJUON8 even though it too works in the same market environment with status quo blood on the streets.

Up
0

Ya cannot beat a computer system.....dip...stick. ..pump...dump.

Up
0

The HFT High-Frequency-Trading algorithms are kicking into over-drive

Up
0

If you can't beat a computer system, write a computer system, the API's are quite accessible.

20% rebound in the last half hour or so. It's almost like clockwork these days.

Up
0

You guys would love this intro, a nice summary including the development around trading AI inc the flash crash of 2:45pm https://www.youtube.com/watch?v=V43a-KxLFcg

I have a few others at hand but that one is shorter and more succinct from even a non tech standpoint.

Human bias and flaws sneaking into the algorithms. Bad feedback loops, resonances, predatory AI acting to cut off other AI, the cryptocurrency market is so volatile and free & easy to manipulate you get a front row seat to much of it happening. BYO popcorn.

Up
0

Where are all the bitcoin warriors this morning.
They should be on this site dancing up some rain.

Up
0

Trying to work out how to sell the stuff

Up
0

Greater fools are getting harder to find nowadays. Every few days, bitcoin loses another $1000 in value. Pretty soon it will settle on its true value. If it takes 4 days per $1k, it should still take about a month to get there.

(edited times to match reality of the declines in the past month)

Up
0

We sold ours mid/late December.

Up
0

You timed it almost perfectly - well done!

Up
0

Well, we mined back in 2012/13 for fun. Had zero idea it would ever be worth so much. But looked at the growth curve, decided it looked like the mother of all bubbles and just sold. We could have hung in longer and made more but we wouldn't have slept ;-) never look a gift horse in the mouth and all that.

Up
0

If bitcoin isn’t linked to a specific exchange, does it trade 24/7? As it’s dropped 10.5% today already, is there a halt mechanism to stop trading?

Up
0

blue meanie...depends on the exchange, some do have that mechanism. Almost all have a mechanism to slow people withdrawing money from the exchange by some method or another, so even though we cashed out all our bitcoin mid/late December, we still haven't got it all out because we had quite a lot. Kraken only lets you take out USD 200k per month, and bitstamp just takes AGES on each stage of the process. The smaller exchanges have less of that, but are riskier imo

Up
0

Thanks Gingerninja. Makes sense, but the dropping could be sustained for quite some time then?

Up
0

bluemeanie, yup losses could continue. The rise was meteoric, the fall could be mirror that trajectory.

I don't personally think that will be the end of cryptos, or indeed blockchain though. Just like the dot.com bubble, people got overly exuberant about new internet companies and something they didn't fully understand, bubble followed. But just as the internet ultimately grew and grew, there's a good chance that cryptos and blockchain will also become part of the new furniture given time. There will just be a lot of drama for a bit ;-)

Up
0

"I don't personally think that will be the end of cryptos, or indeed blockchain though. Just like the dot.com bubble, people got overly exuberant about new internet companies and something they didn't fully understand, bubble followed. But just as the internet ultimately grew and grew, there's a good chance that cryptos and blockchain will also become part of the new furniture given time. "

I totally agree with this, I think some crypto's right now are like the the AltaVista's/Excite's/AskJeeves' of the dotcom, huge names at the time but gone now. However the underlying technology will survive and thrive.

Up
0

But the thing is you can’t really invest in the technology, you can only become a user of the technology. You can’t buy blockchain shares like you can Facebook shares. To make money off blockchain you basically have to guess which currency will perform and buy some coins hoping everyone else will do the same in pyramid fashion.

Up
0

Actually there are a lot of listed companies, even banks which are leading development with blockchain. Cryptocurrencies is just the coin trading market and not really a poster boy for the tech at all (being rather more simple than many real world industry requirements).

Up
0

I think you missed my point a little. To use your Facebook example, I was saying you can't buy shares in the "internet" itself but you can in facebook, google, etc. Blockchain is the platform, like the internet was/is and its application goes way beyond fpliiping a few virtual coins back and forth.

Up
0

The tech in and of itself has been around for over a decade and applying it already has a limited set of use cases. However funding donations for startups existed for a bit (with fiat currencies and companies got into trouble around accessing & blowing funds) and the cryptocurrency market offers a looser less assured funding promise. Better for the company and closer to just a donation without product/performance promises for the customers. The sentiment and market manipulation is what is driving it currently and the larger whales are the ones who normally set off the frequent rapid fluctuations in volatility. One has been selling down since December and hiding the transactions in random values and waves (hoping no other AI detects them and most people do not pick up on it until a large 20k chunk would be dropped at once at the end). Bit of a shame it is so corrupt in the market & communities. There was an ideal but it was on a bed of no ethics, no trust and no integrity. With the reactionary governments shifting a little weight the market might get a little cleaner but likely it will just hum along for a while with a some whales holding 95%, a lot of faithful believers still clutching their ledgers and a lot of sharks preying on both.

Up
0

unregulated and often the exchange shut downs are normally due to poorer tech performance & planning. Many cannot get access to the services because the did not plan for a traffic load appropriate for their customers. Bit of a shame, if it was a games company that in itself could be a death knell.

Up
0

i commented to friends when the twins hit a billion on bitcoin, they were crazy not to sell half and put it into over assets to retain some value if things went south.
maybe they might be right in the long term, i suspect not

https://www.cnbc.com/2018/01/12/winklevoss-twins-are-bitcoin-billionair…

Up
0

I remember you timed it well. family did ours in parts and kept some (still for the same punt/nostalgia). Some people literally put all their savings and maxed out their credit on the stuff more recently (July to date), they are running at a huge loss now. But there have been many more caught in the Bitconnect ponzi and other scams. Really a tough market to do due diligence on as anyone with a website template & document editor can setup for a new ICO. Seen many of the scams which got millions and they had even paid marketing campaigns and press support brought. (Much like the NZ herald and Stuff posted at one point for paid ad articles with actors) The stuff is convincing to anyone outside, even inside the stuff looks optimistic, but absolutely buggered for even basic trading requirements.

Up
0

Still here, but man there is a lot more to watch, especially last night, that breathers are needed. It is more interesting mathematically, technically and socially it is a thing to behold and far more stimulating than the general hum of news. Even AI in different forms have been weaving through it. So much to catch and document. This is years of research & journal papers in the making. The experience is both frightening and exhilarating. It was just as volatile going up and family got out along the build up when we could see things souring market & tech wise. Sure we missed a bit near the top but in the scale not that much, (a new car? trip to Aus? I think those things are small things that can wait). For a few years it was on a slow boil socially, but in the past year, the diff is substantial.

Up
0

Lets hope US farmers are happy to be the fall-guys

The fall-guys are US taxpayers.

The U.S. Department of Agriculture (USDA) spends $25 billion or more a year on subsidies for farm businesses. The particular amount each year depends on the market prices of crops and other factors. Most agricultural subsidies go to farmers of a handful of major crops, including wheat, corn, soybeans, rice, and cotton. Roughly a million farmers and landowners receive federal subsidies, but the payments are heavily tilted toward the largest producers. Read more

Up
0

Whether income or corporate taxes, and even the various other non-real estate excises, there has been lethargy in the US tax base. As a result, municipal governments have had to exercise enormous restraint. Budgets do not grow as they once did, as a result projects get shelved and canceled. Read more

Up
0

More Jobs for the Bureaucrats in these big country rackets. The EU is just as bad. They all drivel on about "free trade" but really they are all about Jobs for the Bureaucrats for Generations to come.

Up
0

... the Euro versions of Sir Humphrey Appleby and his Snivel Servants are alive and thriving in Brussels ...

It's the brightest growth industry in Europe ... producing bureaucrats ... fair do's though , it's the same at any enormous enterprise ... check out the number of seat warmers collecting a $NZ 100 000 + salary at Fonterrible ... or the Orc Land City Council ...

Up
0

I am gonna Automate them all Gummy.....Get a computer app to make sensible decisions and Save the World heaps...30%.....nah...all of em.

https://www.bloomberg.com/news/articles/2018-02-06/robots-may-affect-30…

Up
0

Nationalism akin to Tribalism
Globalism expands horizons for countries & peoples but do not expect transformation to be equal anymore than capitalism delivered
Stop bleating old mantras & get ready to pick up bargains after the fallout in the markets
Trump just added another 2 Trillion plus to US govt debt over next 2 years Taxcut delivered $1:50 a week for a school clerks wages Rich & corporates pig out on their taxcut & Trump Family will save cool Billion when the morons life ends saving on death duties America ruled by the rich for the rich never changes

Up
0

I reckon imperialism and colonisation would expand horizons. When you think about it globalism is colonisation in reverse. Many different ethnic groups come to to the former great power's home countries and European majority former colonial possessions and set up enclaves and ethno-landscapes and thrive. This can benefit both groups.

A scholar Bruce Gilley recently published a controversial paper The Case for Colonialism suggesting that African countries invite Western powers back to set up charter cities. Think of Hong Kong as a type of model along these lines that has undoubtedly assisted China with connecting with the rest of the world. Hong Kong is now one of China's greatest possessions.

Currently globalsim is only really being practised in the West but what if it was accepted everywhere? Nationalism is seen as an evil in the West so why not see it the same way in other parts of the world?

Up
0
Up
0

Northern Lights, that is hardly a scholarly link.
An excerpt,
Still after being a globalized country we all sovereignty.
Wot?
Come on, you can do better than this. Where was the violence with Hong Kong?..um after 1898? Really Hong Kong was like a globalisation model.

Anyway the contention is if nationalism is bad for the West it's bad for other countries too, right?

Up
0

I'll just bet that when you are blathering on about colonization and how wonderful it all is, that not one thought has gone through your mind as to why here, and pretty much everywhere that has been colonized, the original peoples now form a minor part of the population but manage to make up the bulk of prisoners. USA is probably not in those figures, to be fair, as they reduced their native population so much, I would hazard a guess they are much less than 10% and the USA imported another group of people to be ground down and become prison fodder..

Up
0

1st day of the new fed chairman, and looks like the markets are sending a message, we can not afford too many rate hikes with the amount of debt around now

Up
0

My understanding is that central banks have a remit to keep inflation within a certain target band.

Kowtowing to people and organisations that have taken on foolish levels of debt is not within that remit.

Up
0

... it seems counterintuitive that central bankers kept interest rates hysterically low because of their inflation bands not being met ... whilst at the same time house prices were rocketing to record highs and beyond ... inflating to levels that only the well heeled or the soon to be deeply indebted could possibly afford to buy ...

Were the central bankers judging the conditions by looking out the wrong window ?

Up
0

They had the finger on the pulse, the hand in the pocket, the name of the printers, the stock of goodies sold for Christmas, the card was in the post and all credit to them was due...by the next due date.

Things is booming, things are sweet, the proof of the pudding is how much Christmas Cheer and spirits are left over in the Warehouse, Harvey Norman and the extended sales....to February...this year.

We have had record sales, Houses must be dressed, Kids must be dressed for school, Windows10 must be got ready...it is 10 years since 2008...GFC was just a blip...China wants its mega-money back...all is well with the World.

Made in China, imported to Awkland, redeemed back to front ...America is great again, just needs a trillion more or less...Wanna buy a Jeep, cheap as chips...or a Japanese import...or a crap camper van at extortionate prices...or a Holden...or the diesel to run em....we is booming...cheap credit...no sweat.....just sign...here.

Oh and buy the way....USA vehicles, put on the house...in Sub Prime...payments....never ending.

Sign of the times. ..no cash...Gummy...

On reflection...them windows, are trans-parent...cash is made to go around...zeros...ones.....wouldn;t swap em...at any price.

Wanna buy a Bitcoin...anyone got a bit...left...I put the house on it...came up Trumps.

Up
0

Gummy, you heard of this guy? I picked clip at random
https://www.youtube.com/watch?v=7GbqkgmSgh0

Up
0

To link it to the unemployment rate in NZ as well will make it doubly hard to increase it! Especially if they water down their stated plans to reduce immigration.

Up
0

FED are treading lightly They don’t want to be blamed for causing GFC2
Looks like they needn’t worry the sell off in the markets has started
It was Trump and his taxcuts and tax revenue reduction that blew out the budget & will increase US debt by a further 2 Trillion plus over next 2 yrs
Trump taxcuts were built on swamp e Con omics & hype

Up
0

Obama added USD 6T in debt during his tenure, so another USD 4T to go for Trump to equalise..

Up
0

Ludwit
You think Obama responsible for the GFC ?
Keep dreaming

Up
0

He's referring to how Trump seems to just want to either destroy or beat anything Obama has done. There's a theory Trump is still mad from the roasting Obama gave him at a press dinner.

Up
0

So a few bytes in a block chain aren’t worth 20k US?

Up
0

Everything in the red... except Shanghai, in the green and up almost 1%... how are they uncoupled from the global economy?

Up
0

Cash time?
I sold overnight all fixed interest being 18% of holdings. Now 23% cash earning zilch but saving against almost certain loss.
No regrets.

Up
0

I did exactly the same yesterday morning. I’ve taken a couple of % hit, but rather that than a 10% or even heaven forbid a 20% knock.

Up
0

Basel & Blu Meanie
So you both cashing out of term deposits because you fear haircuts from banks too ?
NZ is a safe haven in a financial crisis but no insured deposits like Australia has
Why do you think foreigners love it like Peter Thiel who professed his love for NZ

Up
0

As i have said before nothing happens in China without the Govt involvement.

Up
0

I wonder how much of China’s stock market is now owned by their Central Government? I wonder how this will affect their economy going forward?

Up
0

In 2014 98 chinese companies were on the Global 500.Of them only 22 were private.
Good book to read is Against the herd.
Contrarian investment stratagies you should follow.
Steve Cortes.
Gives a good run down of why you should not invest in China,just his opinion.

Up
0

I will put that on my reading list. Though to be fair, even if I had bunches of money, I would stay well clear of investing in and anything to do with China. It is an “ounce of communism wrapped up in a pound of capitalist cure,” but at the heart still communist.

Up
0

They are not communist in anything but name, state controlled capitalism all held together with totalitarianism.

Up
0

A little digging into China policy and you will see how communist they are. Totalitarian indeed, but that is essential in Maoism. This new Silk Road is nothing more than expansionism and future proofing the collective future of their masses. World domination and financial control will bring about the new cultural revolution and it will be very much in the image of the great Chairman...

Up
0

Oh all of that and something to be very wary of, indeed, but again, I would not call it communism, not in the true sense of the word, really. Communism works just fine, in communes. For it to work it requires much consensus, you can only really do that on a small scale, as soon as you get some sort of authoritarian figure dictating how things will be, it is no longer communism.

Up
0

Fair point.... but I think China govt does see China as one big Han speaking commune (:

Up
0

I am sure they do, and it is why I am as particularly wary of them as I am.

Up
0

Over the years the Wall Street Machine has done too good a job of ingraining itself into the economy and peoples financial lives.
In a general sense it underpins the economy and overall financial well-being – the stock market and the shenanigans on Wall Street probably exert far too much influence.
With the GFC mountains were moved to get the market to recover – whatever it took – the market simply has to remain strong.
And nothing appears to have really changed – and the rules are once again slowly being removed or relaxed.

Up
0

Wall Street drops! Oh god, what has Jacinda done now!?

Up
0

Wall Street never dropped 1200 points when the Jolly Kid ruled the Gnats and our fair land ... girt-by-sea ...

... I blame the Prime-Ministerial Pregnancy !

Up
0

It would be illuminating to have Google search stats by geography and see who is searching "what is a share market" and "where is Wall Street"?

Up
0

Wall Street is where Bunnings , Placemakers and Mitre 10 hang out ... a DIY paradise for the home handyman ...

Up
0

Share market? Isn't that where you can get that Ikea stuff and put together something to sit on. I've heard of people who sit on their shares.

Up
0

Trapped Traders

Dilemma for NZ based traders and investors and Kiwisaver funds - NZ markets are closed today

If NY tanks again tonight there is not much they can do - NY went 5% limit down

Up
0

Bitcoin down 65% since it’s spectacular highes in December! Am I reading that right?

Up
0

.. it's still 10 000 000 % above it's lows of 5 or 6 years ago ... when it was unwanted , at 6 cents per Bitcoin ...

65 % below it's highs ... but 10 million % above it's lows ... it all depends upon how you frame it ... from a winners or a sore losers perspective ..

Up
0

Indeed, but most of the new ‘bitcoiners’ would have sold their house and the kids bikes when the price was 12000 and waited for it jump to 500 000 as many had predicted. As it drops below 6000, some people are going to be hurting a lot.... I think “sore loser” is probably a slight understatement!
Watch the free fall live here - https://www.cnbc.com/quotes/?symbol=BTC=

Up
0

If this guy bought at the beginning of Dec and hasn’t sold, his musses is going be pretty pissed!
https://www.stuff.co.nz/business/money/99656109/father-of-three-sold-ev…

Up
0

We mined our own in 2012/2013 and sold in December. Nothing but love for Bitcoin in our house ;-)

Up
0

Well done you! Perfect timing (: I suspect there will be some folk feeding pretty burned about now.

Up
0

It would appear that Bitcoin was the first domino, equities the second, will commodities be the third followed closely by housing? This all strikes at a time when fundamentals that support todays house prices are described by many as stretched - right?

Up
0

If only. Tragically, as the money is pulled out of equities it’ll find the safety of Auckland property...

Up
0

I have a lovely place in Te Atatu South if anyone is interested :)

Up
0

That happened post the '87 crash but it didn't last for long. IIRC property took a hit in the early '90s then employment became uncertain and graduate careers took a knock.

Up
0

It could well be. Interesting times ahead for all of us if this turns out to be GFC2. I am self-satisfied that I have protected my family from the worst of it as best I could by being extremely financially conservative, but the reality is that no-one is left untouched by a crisis.

Up
0

Well said Ex Expat.

Up
0

Wrong, crises provide opportunity. Financial conservatism is a very subjective condition, having the majority if not the entirety of ones wealth in a single residential property in the Eastern suburbs is not extreme financial conservatism nor provides protection.

Up
0

Welcome back anyway Cowpat.

Up
0

A family tragedy in October led to a necessary change in circumstance. Commenting is somewhat therapeutic.

Up
0

Sorry to hear that Cowpat. We all have our differences here but I think we are all rather fond of each other at the end of the day. Take care and stay strong.

Up
0

My condolences cowpat. Hope you and your tribe are coping okay.

Up
0

Condolences, Cowpat. Hope you and family are doing okay.

Up
0

Cowpat, agree with you on condition where there is leverage to implement remedy. Officials are the first to raise concerns over limited ability of central banks to provide support if there was another GFC2 too soon. I suggest the next slump will be much much longer and way deeper.

Up
0

You may have missed a few posts Cowpat. When that single residential property has a CV well over $2,000,000 it's likely to form a significant part of a salary earners wealth, and it does, however it was paid off over six years ago and the saving habit that paid it off has continued to this day. I possibly made an error in putting some of the savings out for one year, but short of an OBR event I'm in a better position than many to take the opportunities that come in a crisis.

Up
0

Good points ex-expat! I think my tribe will be okay too.

Up
0

Yep, while the Dow did it's much shorter performance the cryptocurrency market turned and said "hold my beer". Even to over 20% down on Bitcoin in last day (held up for quite a few hours). Highly volatile goes both ways.

Up
0

Predictable "soothing" words from authorities "economic fundamentals remain strong and that's the main focus" I think it's fair to say that collapsing stock prices will possibly undermine these fundamentals on a dime. It's the first sign of trouble ahead. These same economic fundamentals are being held together by stratospheric stock and real estate valuations in the first place. Cheap money is the cause of today's panic not the remedy for the coming cold.

US futures are pointing to further falls tomorrow morning with no doubt many dead cat bounces in the trading sessions ahead.

Get out of debt - now.

Up
0

I wonder if Shanghai will have a sudden ‘rally’ two minutes before the market closes!?

Up
0

LOL! if the communist party direct it to be so - it will be done. Look away world, nothing to see here but normal abnormalities.

Up
0

It was only a matter of when it was going to happen, the world sharemarkets taking a bit of a dive!
There are too many forces at play that will affect world shares and owners of shares can do nothing about it!
Houses as an investment providing you buy them right and have positive returns can not be beaten, end of story.
For those that currently own Bitcoin, I hope you can afford to lose most of it as that is what is going to happen.
Why on earth would anyone new be enticed into buying something with no value in the future?????

Up
0

Sigh

Up
0

Yawn.....

Up
0

You are right as always THE MAN 2.

Up
0

Probably because there is no point in buying houses at the moment especially in Auckland and Christchurch where prices continue to drop. They bought bitcoin in desperation. The Dow has lost only what it gained in January. I hope it drops more as there will be some great buying at some stage.

Up
0

Gordon, hope you are ok?
Houses are always worth buying if you know what you are doing and there is future upside and the returns are good!
Hopefully the sharemarket doesn’t dip too substantially as it will stuff a lot of investors.
KiwiSaver returns will be in negative territory now for the past year as the normal returns are pretty small,even on good years.
It is only the contributions from employers that make it worthwhile!

Up
0

you do understand the reason for the sell off in markets, they have been given the jitters by rising interest rates and the prospect of CPI inflation causing them to rise quicker than previously perceived especially in the USA due to the stimulus created by trumps tax package and wage increases

in simple for property investors looks like mortgage rates will rise quicker than they expect.

Up
0

What to do with money you can lose that you budget for relaxing down time 2014
Option 1: BBQ that month.
Option 2: Ticket to a music event or dinner out.
Option 3: New game.
Option 4: See horse races at new years.
Option 5: Courses/classes.
Option 6: Tech equipment/craft equipment.
Option 7: Explore cryptocurrencies after public tech lecture with food & drinks with friends.
etc.

Yeah there were a few runners up, but in the end but considering others have even more costs for downtime e.g. gym, boats, fun conferences, movies, music, sports games, drinks, home tech, even holidays etc. Cryptocurrencies would not have been so bad an option to study. Certainly in 2017 they would have been a risky option with less benefits (considering the fees as well). But since the rise & crash is over such a short period only the past 3-4 months value has dropped (fees included).

You are right though, evaluating value in a online social community is hard and if you were aware of the costs made by hardcore & professional gamers, (those who treat it as a sport), then you likely would say a similar thing about investments they make in artificial objects. But overall the intangible does have some social value, (we have it in existing high performing listed companies), but tools for measuring the social value are not accurate and it is too easy to manipulate. 2016-2017 was an explosion of the market.

Up
0

RP, nothing at all wrong with having debt, providing it is good debt!
Most wealthy people who have built their wealth over time have had heavy borrowings, as that is how you do get wealthy and financially sufficient.
If you are sitting on an unencumbered home, you are not making your money work for you.
Your equity in your home should be being used to purchase income producing assets, it is not rocket science.
Anyone that skites that they owe nothing on their home is not overly financially savvy, and needs to talk to property investors, who can offer them financial advice that will be beneficial to them.

Up
0

...and who is going to offer this advice - you.

Up
0

I offer advice to many people that want to improve their financial position Robot!
These people are extremely appreciative as they are financially better off.
As you know I have been predicting a sharemarket drop and interest rates will not be going up despite many saying they will!

Up
0

So you say - but there is more to investing than just property. You seem unable to give any advice that I would consider useful - mostly stating the obvious - so I still consider you nothing more than a fraud. To say that the share market will drop is like saying is going to rain sometime in the future - predictable but useless. Most of your comments seem to lack an internal consistency - on the one hand the current government is going to crash the economy, yet you believe that everything is wonderful in Christchurch - as if there is no link between the two.

As i've said before - people who start an argument about property v's shares v's whatever are generally trying to sell you something. In your case I think any advise you could or would give would be next to useless.

Up
0

Robot, property investing is easy if you do your homework and buy right.
Don’t need to give you any advice at all and you are not receptive to advice anyway.
No not everything is wonderful in Chch but if you want to get ahead then Chch is a city that it is possible in.
Don’t need to get into a debate about property vs. shares as today’s performance on the world shares is evidence enough isn’t it?

Up
0

"property investing is easy if you do your homework and buy right" - so is investing in the share market - but as you've effectively admitted yourself you don't know anything about the share market - doesn't mean others don't.

"you are not receptive to advice anyway" - just not your advice that's all. It's easy for people to promote themselves as whatever but I've asked you to provide practical advice but yet to hear any.

It is just a little premature to say the current decline in the share market means anything - it certainly doesn't mean the whole world economy is about to collapse (nor the share market) . The share market may be suffering a bit of irrational exuberance - but most markets are currently suffering from irrational exuberance. There is a theory that the share market is a leading indicator of the economy - the share market declines the economy will follow etc , etc. and what effect would that have on the housing market.

Up
0

World share markets are dropping as inflation is rising.Interest rates will be raised to slow down inflation and that affects everything including house prices and equities. There is no where to hide. Labour is doing a great job in dropping house prices. As more of their measures kick in it will be interesting to see what happens especially in Auckland and Christchurch. And some say house prices are safe from external forces . Housings worst enemies are interest rates, Reserve Banks and governments.

Up
0

i dont think property investors understand the relationships between world markets and their mortgage.
i would not be surprised to see the aussie banks tighten credit overnight so would expect lending to slow while we go through this period, and even have them call in some loans to shore up the balance sheet

Up
0

I have consulted to your type on an all too regular basis over the years when they have troubles with their financier. There’s a good reason to be debt averse when you’ve seen what happens to those that are over leveraged.

Up
0

Sooooo, I learnt about VIX today, the Volitilty Index. Today’s blood bath was the fourth highest event since the 1990s and surely appears to be unexpected and certainly unprecedented. This looks like the beginning of somethingbig...
https://www.interest.co.nz/charts/confidence/volatility-index

Up
0

Tracking the CBOE VIX is a popular chart here.

Up
0

Thanks David.... will keep it interest.co.nz.

Up
0

Flash crashes and even more long term crashes happen often when directed by algorithms you can get a lot of them per year e.g. https://en.wikipedia.org/wiki/2010_Flash_Crash. The events directed by people and other options can also now be directed by AI with news parsing, bots and generation. That systems can be more sophisticated and operate on levels far above even companies with human traders is not new. But ethically it is new or should that be unethically. Overall though what will shake out looks like it will make things more difficult for humans to work around.

Up
0

"The Vol Market Finally Broke": A Quant Explains What Happened Today, And What Is Coming Tomorrow

https://www.zerohedge.com/news/2018-02-05/vol-market-finally-broke-quan…

Up
0

"Termination Event" Arrives: Traders Panic As XIV Disintegrates -90% After The Close

https://www.zerohedge.com/news/2018-02-05/it-traders-panic-xiv-disinteg…

Up
0

Mateee... that double question mark... I suspect she’ll be right... but am watching the ‘humans’ closely!

Up
0

US Markets down 6%! Stock markets go to shit first followed by the rest of the asset bubbles. We've been sitting on the sell button for years now. Is this the first jitter we talk of in 2 years time? Capitalisim.....just like a cheeseburger its predictable and consistent all over the world and comes in one flavour.

Up
0

This aspect of the market moves merits further investigation. The typical is that volume sharply increases with incerasing volatility. What changed? Personally, I'm quite happy to see the hft disappear, and hope that some of the fraudulent hft starts getting prosecuted, but am not holding my breath...

Up
0

a lot of the trading is done by computers and algorithms, that is why it moved so fast, when it hits certain levels put orders are sold. and it also why now the markets have circuit breakers ( dow is 7%) so that the computers cause a problem.
the talk this morning was a large fund sold and that is why it was dropping 100 points every ten minutes from 600 to 1600 until they sold their positions and buying kicked back in.
it was fascinating to watch the speed it moved and it will be interesting to see if it ever comes out which fund it was

Up
0

Sharemarket’s current moves of little concern in a general sense – measured against the recent run-up and underlying strength of major economies – this could bounce back relatively quickly.
Good news for KiwiSavers – your contributions could buy a little more this week, or maybe next week.
Bonds response has been relatively muted – no end of the world signals coming from there currently.
However, the bond market simply dwarfs all – and that’s where the fun and games lie – that’s where the infamous “Greenspan put” lays in wait, and monstrous, commission laden bets could ultimately sour.
A rush for the door – and no counter party to be seen – “sad”.

Up
0

https://www.zerohedge.com/news/2018-02-05/pentagon-auditor-cant-account…

Trillions in debt...and this lot quibble about a few missing..millions...at the Pentagon.. Auditors must be desperate...to find 800million...should have realised...somebody needed a little ammunition...or is it tanking as well...and they thought no one would miss a few dollars from the empty kitty.

Up
0