US firms fear tariff impacts; China firm stress sees debt levels rise; Argentina says deficit-busting plan popular; Westpac culls property investors; UST 10yr at 3.08%; oil leaps, gold holds; NZ$1 = 66.5 USc; TWI-5 = 70.1

US firms fear tariff impacts; China firm stress sees debt levels rise; Argentina says deficit-busting plan popular; Westpac culls property investors; UST 10yr at 3.08%; oil leaps, gold holds; NZ$1 = 66.5 USc; TWI-5 = 70.1

Here's our summary of key events overnight that affect New Zealand, with news oil prices are on the move up today.

Firstly, Wall Street is broadly lower today. Both those rising oil prices and rising political risk in the US are shifting investors to a risk-off mood.

And that is despite the Chicago Fed's national activity index being unchanged in August, and holding at levels that indicate solid growth in the American economy. And that was backed up by the Texas regional survey, although many of those surveyed are fearful of what the trade war will do to them. The Texas survey dipped when a rise was expected.

In China, and before the latest heavy US tariffs kicked in, a major regular survey indicates that manufacturers are under increasing stress. An "explosion" in corporate borrowing that isn’t being captured by official government statistics is the key indicator.

And a further escalation of the trade war between Washington and Beijing to include sanctions on financial products or transactions could trigger a financial crisis in China, Chinese researchers warned in a report. The 'report' itself has been withdrawn from direct access due to its sensitive nature.

ECB boss Mario Draghi said overnight the bank would push ahead with plans to phase out its QE program as wages and inflation pick up across the eurozone. His remarks pushed the euro higher against the US dollar. In fact, more analysts are concluding that the euro could be the big winner in the US:China trade clash.

In Argentina, President Macri is pushing ahead with an austerity approach and says he wants the country to never again default. He says he has broad support for his plan to rid themselves of budget deficits. If he can pull it off, he will also win substantial IMF backing.

In Australia, one second tier bank boss is saying that house prices will retreat over the next two years. And Westpac is reported to have sent a one-page letter to all its 'risky property investors' giving them one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply. You can do that when almost all your lending is on variable rate terms.

The UST 10yr is up +1 bp and now at 3.08% and their 2-10 curve is now just under +27 bps. The Aussie Govt 10yr is at 2.71%, up +1 bp, the China Govt 10yr is at 3.71%, unchanged because of their public holiday, while the NZ Govt 10 yr is at 2.69% and down -1 bp.

Gold is also unchanged at US$1,199/oz in New York.

US oil prices are up sharply today and now just over US$72/bbl which is more than a +US$1/bbl jump. But they are up much more internationally with the Brent benchmark leaping more than +US$2/bbl to over US$81/bbl and a four year high. American sanctions on Iran are causing the shift. Separately, there has been a major new discovery of gas reserves in the North Sea.

The Kiwi dollar is slightly softer at 66.5 USc. On the cross rates we are also a little softer at 91.6 AUc, and at 56.5 euro cents. That puts the TWI-5 at 70.1.

Bitcoin is now at US$6,645 and little changed from this time yesterday. This rate is charted in the exchange rate set below.

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Paul Einzig, one of the first to notice and comment on eurodollars, would say in the early 1960’s that bankers practically begged for him not to write about it. There was some real danger to the system, no one really sure what might happen if authorities eventually stepped in. They never did, though we will never really be sure why they didn’t.

AJ.... I'm doing my own study of the eurodollar mkt...
I dont think that linked article gives a better understanding.

Essentially , the eurodollar mkt arose out of the USA$ being the worlds reserve currency... eg.. ( even african taxi drivers will take payment in $US.... ).
Because of that there was no need for those $dollars to come back to USA, and an offshore mkt , post WWII, slowly developed... The vast quantity of $petrodollars and USA imprudent money printing added to it..

There is nothing shadowy or sinister about the evolution of the eurodollar mkt... ( its simply a reflection of the Global demand for $US dollars, outside of USA).
Most of Corporate USA borrows $US , in the eurodollar mkt..
Because of this total credit in USA exceeds total money supply ( It was this that lead me to learn more about the eurodollar mkt )..

In contrast, the Global demand for $NZ only exists within the context of NZ itself...

Roelof, Eurodollars are not US dollars they are digital ledger liabilities.

Yes... I realize that...and I realize that the eurodollar mkt creates credit, just like any other Banking system..

The early evolution was the $US... Was not until Nixon killed Bretton Woods in 1971 , that it started becoming what it is today..
I can't simplify my understanding of something , unless I kinda know how its beginnings evolved..
It started with real $US that were deposited into Banks offshore ( the mkt forces for that happening was the ubiquitous demand and use of $USA for transacting ).. and evolved rapidly with the complete abandonment of Bretton woods and the headfirst dive into unfettered Fiat Money growth.... by all western Nations... and became a real beast win the reagan/thatcher era..
( ALL deposits become digital ledger liabilities.... thats the computer age )

just my view.. and I'd say that I don't have a strong understanding about it.... Stephen Hulme seemed to know a bit about it...but he does not seem to post here anymore

There were no US $ deposited offshore.

of course there were..!!
$US was/is the global reserve currency... Most trade was transacted in $US..

there is only 1.6 trillion Us $ in circulation, how do you account for the 40 trillion of interest rate swaps?

AJ... Interest rate swap are not really money... They are derivatives.. They might have a certain level of "moneyness" ... but i don't see them as money..
That $1.6 trillion might be "cash" in circulation, but there is far more in transaction accts and short term deposits... I'm guessing there are also plenty of $US cash floating around all the corners of the world.

If I have a bet with you for $1 trillion that the NZ dollar will go down to .60 by 30 dec , and we exchange a "contract" ,...then we have just created $1 trillion in derivatives...
If you and I are debt free and dont have any liabilities to anyone else, then the outcome of that trade is inconsequential to anyone but you and I.... In the Wall Street/International Banking world... the risk becomes systemic..

Thats' the simplist analogy that I can come up with to explain the speculative aspect of derivatives trading..
Essentially far as I know, the economic reasons for derivatives are:
1/hedging prices/controlling risk
2/ providing liquidity
3/ Minimizing intermediation...

I'm out of my depth in this subject of repos/swaps/derivatives... but always looking and reading about it.. and for others to correct me...

The problem is that no one knows how big the eurodollar market is, or the security backing those ledger liabilities, is a unregulated market, Your guess is as good as mine in fact probably better, your knowledge is much appreciated.
However it looks like those eurodollar liabilities have been greasing the wheel of international finance for a long time and now it's ending. What does the world look like without those ledger liabilities?

"The result, as noted in a January 2017 article on Zero Hedge, is that central bankers, “who create fiat money out of thin air and for whom ‘acquisition cost’ is a meaningless term, are increasingly nationalizing the equity capital markets.” At least they would be nationalizing equities, if they were actually “national” central banks. But the Swiss National Bank, the biggest single player in this game, is 48% privately owned; and most central banks have declared their independence from their governments. They march to the drums not of government but of big international banks."

Every day, trillions of dollars are borrowed and lent in various currencies. Many deals take place in the cash market, through loans and securities. But foreign exchange (FX) derivatives, mainly FX swaps, currency swaps and the closely related forwards, also create debt-like obligations. For the US dollar alone, contracts worth tens of trillions of dollars stand open and trillions change hands daily. And yet one cannot find these amounts on balance sheets. This debt is, in effect, missing.

As a result, we know little about it. How much is owed, by whom and for what purpose: trade hedging, asset-liability management, market-making? What does it imply for measures of international credit like the BIS global liquidity indicators (GLIs)? Answers to these questions can inform assessments of global financing conditions and financial stability. For instance, serious strains seized the FX swap market during the Great Financial Crisis (GFC). In response, central banks had to replace lost dollar funding that financed dollar assets (McGuire and von Peter (2009), BIS (2017))

US $ notes as printed by the Fed reserve amounts to 1.7 trillion.

Currency in circulation (11) 1,685,180

400 trillion of interest rate swaps

On its December 2014 statistics release, the Bank for International Settlements reported that interest rate swaps were the largest component of the global OTC derivative market representing 60% of it, with the notional amount outstanding in OTC interest rate swaps of $381 trillion, and the gross market value of $14 trillion.[6]

Interest rate swaps can be traded as an index through the FTSE MTIRS Index.

Yes, they own a lot of everything. Let us consider how they get the money for that: They create Swiss francs from the thin alpine air where the Swiss money grows. Then they buy Euros and translate them into Dollars. So far nobody’s raised a sweat. All this is done with a tab of a computer key. And then the SNB calls its friendly broker – I guess UBS – and buys the ears off of the US stock exchange. All of it with money that didn’t exist. That too, is something a little bit new.

ZURICH, Aug 30 (Reuters) - Switzerland’s central bank now owns more publicly-traded shares in Facebook than Mark Zuckerberg, part of a mushrooming stock portfolio that is likely to grow yet further.

A few years back I was pondering the political changes in response to the inability of the private sector to continue growth and consumption. I was thinking we may head toward fascism, and that is still a possibility. Privately owned central banks owning industry is something new though, something not yet tried. It may morph into something else yet.

Roelof this podcast series might assist your study (or perhaps you have moved beyond this). I've tried but ran out of time following it...and need to start over.

Many thks for the link Rastus... I shall check it out..

In, terms of "clouds on the horizon", I am always watching oil prices and particulary long term interest rates ie.. USA 10 yr bonds..

With Central Banks taking the foot off the pedal with QE, the best guess was that long term rates would rise substantially , in "normalising"...
I don't think we need an inverted yield curve to unsettle the mkts...
10 yr bonds above 3.1-3.2 % might do that ...
There will be a tipping point where global long term rates will all rise...?????

When I saw the 10yr rate in Davids report I have to admit I shared a similar feeling to you. Apart from believing that rising interest rates will cause the system to crack, I could not put the finger on what the rate would be at to do that. However it is well above the 30 year trend line now, my guess is the trend will win in the long run. Lack of liquidity is going to show up somewhere soon.

I always said that lack of liquidity would get us..... :)

Yep. I had the same feeling about the North Sea gas find. Actually the first thought was "how big"? Doesn't really matter how big anyway, England has peaked with two energy sources now, they would do the same with any more they find.

of course, we live on a finite planet, even the sun is finite.

Yet no one is really looking, are they?

Seriously looking at a pure EV right now. I want to jump in as late as I can to avoid debt but before the price of them take off, timing is always is the hard part.

Because money created by a new loan or as bookkeeping liability is extinguished when the debt is repaid. The eurollar market is being stalked by deflation and liquidity issues for this reason

When the Swiss central banks creates money, it then gets a Swiss bank like UBS monetise it into us$. Those dollars get spent on Apple and Facebook shares, the sellers get US$. When they panic and sell shares the money is extinguished, losses are borne by Swiss taxpayers.

Therein lies the heart of the matter, it keeps working as long as somebody pays. The underlying collatoral is people paying tax or interest.

Roelof, they can't, put rates up, there isn't the liquidity out there to pay. We used to be able to pay %10,15, or even 20%.
It's a liquity/deflationary fire storm. It used to all reward no risk, now it's all risk no reward.
Want to lend against an overpriced akl house for %3, not me. Want to lend against a dairy farm returning 1%? I don't think so, let's sit on our cash.

Eurodollar University Toronto; Hierarchy, Money, and Consequences

"Therefore, 1 TCF of natural gas would equal 170 million barrels of oil, approximately".

We go through about 100 million a day

So less than two days global BOE supply, energy-wise. I dno't call that major - I call that a drop in the bucket.

yup, only about 6 months gas supply for UK. They'll still be reliant on Putin.

and when people complian about no more oil exploration costing jobs etc, I like to point out this chart,


“And Westpac is reported to have sent a one-page letter to all its 'risky property investors' giving them one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply. You can do that when almost all your lending is on variable rate terms.”

Incredible, I had no idea they could do that. Maybe this will help expedite Australia’s house price falls.

Agreed, from a NZ'ers perspective of a culture of fixed terms it is certainly very interesting.

What happens if not refinanced within the month? Higher interest / penalty rate? Forced sale?
Even alternative mortgages are likely to be at a higher rate and is likely to tip some of those risky investors on the edge.

However, there is no indication given in the article as to how many "risky property investors" this affects and therefore its significance to the property market is uncertain.

A message there for NZ property investors who have held mortgages for some time and currently don't meet the LVR threshold, there might be a nagging worry if they ever have to refinance with another lender.

Here's an article about how quickly a bank can turn from profit to rout if they've made the wrong type of loans and liquidity dries up.

Northern Rock were posting record mortgage sales until shortly before they went pop. 125% mortgages (which is the same as not having regulatory measures on actual asset valuations for lenders) and 6-7 times multiples for interest only debt as the alternative. remembering our Australian relatives have been very generous lending 7-9 times multiples in both our markets until recently.. It was all great and 'it will last until it doesn't!'

Westpac - A Southern Rock!

Hi Pinter8. Totally agree about not knowing the scale, it would be interesting to know at what size it would make a difference as this exercise screams of rats leaving a sinking ship.

Just read the article that David has linked to and what's worrying is the percentage of loans written that fall outside APRA's standards and how that has been in the rise to June. Hopefully Chieftan Orr will be looking thoroughly over his charges and making sure that the same isn't happening here. But I have a feeling that it will be.

I have been seeing articles / vidoes for a while now over OZ's overheated property market. If this letter is true then this speaks volumes for the panic the banks are getting into, yet it seems early days on this, or is it?


"Westpac is reported to have sent a one-page letter to all its 'risky property investors' giving them one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply. You can do that when almost all your lending is on variable rate terms."

Shows how quickly a bank can go from being your best buddy and helping you build you wealth and future etc. to just blatantly discarding you!!!

I cant see other banks picking up these customers without covering their arses which equals high standards and high rates! This will force more sales and put more downward pressure on prices over there.

The proverbial is about to hit the fan

"Shows how quickly a bank can go from being your best buddy and helping you build you wealth and future etc. to just blatantly discarding you!!!"

This is recurring behaviour by the banks that happens in economic cycles, that many don't know about, and this is where they get caught out - this is where highly leveraged property investors fail to learn the lessons from financial history, and instead these highly leveraged property investors will learn the lessons through a personal and potentially painful experience.

In a period of upward rising property prices, many property investors and property developers who don't know that this can happen or have never personally experienced it, will happily maximise their borrowings in order to maximise their wealth creation. This is a period where credit is easily available as banks fight for market share of the lending market. The usual justifications supporting residential property prices are population growth leading to higher property prices, property prices have kept rising for the past 50 years, there is an shortage of houses so there is demand for property, and hence property prices will keep rising, etc. This gets reinforced by those with a vested interest in rising property prices - real estate agents, property tutors / mentor programmes, etc

Many of these property investors are busy focusing on the shortage of houses and population growth, whilst not noticing the changes in the credit environment. Whilst they are focusing on the shortage of houses and population growth justifications for buying property, in an environment of rapidly rising property prices, they continue to buy more properties financed by high levels of debt. Many were encouraged to borrow on interest only terms, justified by maximising cashflow and tax benefits (with the inherent assumption that the interest only loan would be refinanced at the end of the interest only period). On paper, these property investors are multi-millionaires, and enjoying their new found wealth. Envy by others attracts new entrants into the property investing game. Property prices rises start to slow, then plateau. Many of those overleveraged then suddenly get caught out when the credit environment changes, and have a sudden desperate need for liquidity.

The other point to note is that if a property investor who has a LVR of say 75-79%, and property prices fall, then the bank may re-evaluate the collateral value and the property investor is suddenly at an LVR of 85% and then finds a letter in their mailbox as their LVR has breached the 80% threshold. Now this investor potentially has liquidity needs. This is how the downward property price spiral works.

There is a phrase - a banker is someone who gives you an umbrella when it is sunny, and takes it away when it is raining ....

The banks market themselves as being your friend, your partner. In tough times, your real friend would help you out. In tough economic environments, for those that are financially overleveraged, in financial stress and in need of financial help, banks can be more like wolves in sheep's clothing ...

“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”

― Mark Twain

with oil up double from last year you can produce half the oil for the same money.

"Brent (& hence global oil price formation) has been wholly owned by Wall Street & Big Oil since Cohn's ICE market design financialised the oil market from 2001. If it's to be C.I.F ARA then it should be priced in € same way c.i.f China is priced in Yuan. " Chris Cook

There's not a lot of real Brent left. It peaked in 1984.

I interviewed the spokesman for North Sea oil in 1999 and he told me that the reckoned they had 25 years worth of supply left. They currently reckon they have about 25 years left thanks to advances in tech. So go figure.

$100 dollar oil mooted on the day the COL brings its oil and gas ban bill to the House.What is the actual plan? Where is the replacement energy coming from? Where is the lost revenue ($50b by MBIE estimates) coming from? And no fuel excise or RUCs from electric cars.This has been Labour's biggest blunder. No pragmatism, just fluffy stuff. Note I am no climate change denier, although I do believe in realities and the need for considered policy and careful planning.

Pietro - Labour are doing well addressing Climate Change, but that's only an exhaust problem - a result.

And I can understand them sweetening the take-up of EV's.

But money is a different story. It is only underwritten by energy-use, yet the system is an exponentially-growing collection of forward bets (that there will be more energy available n the future). The only alternative, can-kicking-wise, is to 'up' the 'value' of existing results of past energy-use - like houses. I think we've got to the point where we can't value properly in money, anymore. When that realisation dawns on the masses, 1929 will look like a storm in a paddling-pool.

I think we've got to the point where we can't value properly in money, anymore. When that realisation dawns on the masses, 1929 will look like a storm in a paddling-pool.

Intriguing. Can you expound on that more?

ex-pound. I like it :)

Note that I wrote that 10 years ago, and that I gave us a 10 year window. Sigh.

Thanks, will have a read.

Good luck with the prediction. Don't lose faith.
Just because you haven't been correct, yet, don't take off the tinfoil hat.

Eventually your prediction may one day become true...Perhaps if you add a couple of orders of magnitude onto it?

Easy, this is down to P/E ratio. Price of share v the return/dividend on that share. Even without looking at the effects of peak oil the P/E of shares is crazy. It is not in the slightest based on the dividend its priced on capital gain, ie its tulip mania, money for nothing.

Earnings is the return which right now assumes state state growth for ever economics not possible on a finite planet. So that return comes down to what people can afford to pay once we start to ppl cannot afford to pay any more and in fact can only afford to pay less that.

What is money really? it is a proxy or an IOU for work or energy this is a limited physical resource but money isnt, its a 1 and a 0, a digital construct.

So really when we get to it with less energy in the future all the money but especially the debt is not under-written therefore can never be honoured.

This second great depression (or maybe teh second long depression is more apt) will be way worse than 1929 and way quicker. Personally I suspect days or with the micro trading even hours, then this shock travels around the financial system freezing it up.

The environmental risk is too high. The deeper you go the higher the working pressures involved. That means more risk of something going wrong, and much greater effort to stop the leak if something does go wrong. The size of our reserves are not worth the risks. An accident puts other industry at risk, probably to a greater value than that of the oil.

No RUCS for EVS is a temporary thing, EVs and plugin hybrids get RUCS from 2021 I think it is. So 2-3 years of a little sweetener to adopt EVs is nothing in the long term.

MBIE reports states median estimate of $8Billion cost to NZ, but could be up to $23 billion!!! And also states will most likely lead to increased global CO2 emissions. Total muppetry of Jacinda's most-expensive-virtue-signal-in-history is laid bare.

you do realize the goverment still owns most of the power generation in NZ so as demand rises so does the profits, the big mistake was national not looking ahead 20 years and selling off big chunks so that they had a slush fund.
disclaimer brought into all three on offer at the time

Are you that short term an outlook? NZ's oil and gas production is minuscule ditto and the output is already in decline. The big majors have already left NZ they wouldnt do so if there was any significant oil or gas to find. Even if we go for what is out there and its not much it just buys us some time at best and taht ignores CC. So the simple answer is we have to get off oil.

The reason oil is probably going up is a shortage either actual geological limits ie peak oil or political desperation in either case it is a growing problem for NZ. Sun and wind on the other hand cannot be politically limited or economically priced above what we can afford. So the Q is then why are we not getting off fossil fuels? oh wait the COL is trying to.

MBIE's report was a joke IMHO, how it passes as competent is mind boggling, lucky for them I am not in charge, they'd all be un-employed by now, LOL.

"I am not climate denier but believe in realities" sorry but that is an oxy-moron. The reality is a) CC is real and the impacts are here and getting bigger, b) Oil is moving into un-affordable territory economically so setting a policy of moving off it is a Govn's job.

My money is still on Westpac being the first. Now what sensible bank would want to take on the crap that Westpac don't want? I have a feeling they'll be left with burnt fingers from carrying those 'hot potato' loans.

'In Australia, one second tier bank boss is saying that house prices will retreat over the next two years. And Westpac is reported to have sent a one-page letter to all its 'risky property investors' giving them one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply. You can do that when almost all your lending is on variable rate terms.'

You're right, and now that this has been made public i'd suspect the rest of the banks are going to be very scrupulous over the next 2 - 3 months. Where a Westpac customer would normally be taken on in a heart beat, there will most definitely be added hurdles going forward.

It may be time to repeal the OBR and set up some depositor guarantees - no point waiting 18 months before realising there may be an issue when the money flies abroad and the capital ratios get hammered.


A few delusional property bulls here have often referred to their banks as business partners. I say again, YEAH RIGHT, pull the other one!

They were right RP, it's just that they are now being divorced. .lol

Came home and found the Bank in bed with the neighbour...

And in a few more months the Bank will be handing the neighbour the keys to the house most likely.

Hahaha. . Neighbour being the other bank? :)

Hi RP. Do you think it went a bit like a 'Dear John' letter?

'Dear John

I'm sorry to put this down in writing rather than talk to you directly but I have met someone else and can no longer continue our relationship. I have shared some wonderful moments with you, it was great picking up the rent cheque every fortnight from your tenants and getting to brag about it in my AGM but sadly I have met someone else and he doesn't want me to play around with you and your friends anymore. It's not that I didn't have fun, I did but my new man 'Mr Liquidity Market' doesn't want me fooling around anymore and has asked me to make a firm commitment to settle down and do as he asks.

I do hope you understand and hopefully there will be someone in the future who will make you happy again.

Best Wishes

Deirdre Westpac' - I think the chap in this was called John too.

The race is now on when the greedy try to hide from the inevitable price of folly. The panic begins.

It's worth noting the many investors caught out by this that do manage to refinance will undoubtedly be exposed to even higher interest rates. It's a catch 22. Its exponential and the more the market slides, the more will get "Dear John" letters.

Hmmm, sure it was.. Dear BLSH..

some farmers thought that too until the milk priced dropped

They are partners in the sense that the borrower takes the risk and the bank takes the money.

All eyes to Australia then - Westpac covering their own ass has got to be the first domino to fall.

That rather public signal will have all the other majors looking to do the same (and certainly not looking to pick up each other's cast-offs) - which will mean second and third tier lending for those who, up until now had been actively courted by the majors.

Of course, these 'risky' borrowers to a certain extent have themselves to blame - riding on variable rates doesn't really give you any security - and there will be no doubt some who will be unable to find alternative lenders and will be forced to sell assets, in a falling market, at lower prices, some quite desperately so.

It'll be a game of financial musical chairs...

What are they classing as “risky”?
If they are risky then the Bank has not been prudent enough with who they have lent to, so it is the Banks fault.
If the loan is not in default then why would they sell them enough?
Property investing done correctly can not be beaten for security and income.
You can not tar all investors with the same brush.

dp. Too many beers at the bar


dp. Too many beers at the bar

...What's you excuse for every other post, then?

Look not everyone is negative towards property in Nz!
Reality is that most parts of NZ are still green for go, if you are looking for a sound investment!


I don't mean to sound offensive, TM2, but the overwhelming majority of your posts don't strike me as being intelligent.

You can sound offensive as much as you like Nymad.
The fact that I am successful financially and not intelligent I prefer, rathaer than calling yourself MAD!!

What are you doing on Interest while drinking at a bar on holiday? Do you not have any friends to talk to? Hilarious.

drowning his lonely lonely sorrows,

Great atmosphere , warm weather , apparently bloody cold in ChCh at the mo.
Wife on the beer as well cos bit hot.
The people have all been upsized!
It is just after 3 pm here

Martin North from Digital Finance Analytics has covered mortgage refinancing in a video

Watch the following for the correlations Australia has with the old Celtic Tiger;

Hi John. Sorry we should not have lent you the money to buy those five houses. Now we need it back. No other bank will be as stupid as we were and lend you the money. So you are going to need to sell your houses. I know it's not great timing. There are quite a few other people in your situation that are getting the same news. But what we are doing is putting out some really good interest deals in the market for people who can afford to buy your house on P&I terms. Of course they won't pay what you paid. It's kind of a refinancing. Just that we are not refinancing you but someone else. But like we said we just need our money back. All that paper equity you thought you had wasn't real anyway. It was bound to happen eventually. The music has stopped and there are no more chairs left.

How is it gas prices can be $2.25 in Auckland and $2.40+ in Wellington/South Island. Especially since Aucklanders have a 10 cent gas tax.

How did they ever justify the caltex/z merger?

Gas prices are more than a bit wonky here in NZ. I saw $2.01 in Waipukurau over the weekend... I'm pretty sure that the gas being sold there is being delivered from locations that have prices in excess of $2.20. At some point, some .gov will address predatory price structuring. Extra points for addressing the building materials duopoly... unfortunately, it appears that there is no political party that wants to fight the good fight.

Auckland can probably be explained by logistics at a guess?

What surprises me is gas prices are around 20c/L cheaper in Masterton than Wellington. Unless all the bulk fuel supply for Wellington comes down from Auckland via road, stopping via Masterton on the way this doesn't make sense.

Coast Vessel + truck & driver + driving 2 hours over the Remutaka Ranges + driving back empty = 20c per litre discount.

AndrewJ interesting following your comments on the Eurodollar. The cumulative 11 trillion dollar US trade defecits play a huge role too I believe? Check this publication out from Nedbank and let me know what you think.

Westpac are simply following the first rule of finance.

If your going to panic - Always be first to panic !