A review of things you need to know before you go home on Wednesday; no rate changes, LVR relaxations, regulators act, a Maori bank?, swaps lower, NZD higher, & more

A review of things you need to know before you go home on Wednesday; no rate changes, LVR relaxations, regulators act, a Maori bank?, swaps lower, NZD higher, & more

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

MORTGAGE RATE CHANGES
Nothing to report.

TERM DEPOSIT RATE CHANGES
No changes here either.

BIG CHANGE, LOW IMPACT
The RBNZ eased its LVR restrictions today. But given them tightening bank capital requirements (and collateral impact from the Hayne Commission), it seems unlikely that bank appetite for looser lending standards will rise.

TON OF BRICKS
The Financial Markets Authority has issued a public warning about Brian Ferguson, a registered financial adviser from Palmerston North. It involved copy-and-paste of a clients signature. In one instance, Mr Ferguson had the consent of the client. In the second instance, Ferguson claims it was done with the verbal consent of the client. The FMA accepts that Ferguson’s conduct was not intended to mislead those purchasing the policies. However, the conduct was likely to mislead the insurer who did not know of the substitution.

TWO TONNES OF BRICKS
A former chartered accountant has pleaded not guilty to charges brought by the Serious Fraud Office. The SFO alleges that Christopher George Wright (62) filed tax returns on behalf of his clients and misappropriated refunds of about $1.01 million. The defendant is believed to have defrauded 245 clients over a six year period from January 2010 to April 2016. Wright is charged with one representative charge of ‘Theft by person in special relationship’.

DEBT DISRUPTOR WARNING
The dangers of AfterPay are getting attention in Australia. This is a buy-now-pay-later industry with a business model that can't meet responsible lending standards; but because they nominally don't charge interest they currently operate outside regulation. In a review of this new industry by regulator ASIC they are seeking wider powers to bring this sort of activity under its review.

ONLINE RETAIL STILL UP STRONGLY
New Zealand’s total online retail spending in October was +11% higher than in October last year. Growth in online purchases from local retailers outpaced the growth in purchases from overseas sites, for the eighth month in a row. Spending at domestic online sites was up +14% in the same period.

A NEW MAORI BANK?
The Maori Council today floated the idea of getting a Maori or Iwi bank established. The drive flows from concerns that many low-income Maori (and others) don't get access to loans that could get them into the housing market. Relaxed LVR standards aren't enough they say, pointing to problems with historical credit reporting that colours current ability to service a loan, Maori land title issues, and conservative bankers who can't see past historical 'paperwork' risks. They also claim that many iwi organisations would like to support SME financing though a formal banking structure. A spokeperson for the Maori Council told interest.co.nz the call for a bank is more a way to get the impediments more widely discussed and resolved. But as these issues were first highlighted by them in 2002 they are trying to find a more effective way to get meaningful progress.

BACK TO NORMAL
We should note that our hydro lake levels, which we had reported two months ago as being unusually low, have now returned to virtually normal levels on higher recent inflows

SWAP RATES UNCHANGED
Wholesale swap rates are down about -2 bps across the curve, but less at the short end. The UST 10yr is little changed at 3.06%. The 2-10 curve has slipped further under +23 bps. The Aussie Govt 10yr is at 2.62% and down -2 bps, the China Govt 10yr is unchanged at 3.44%, while the NZ Govt 10 yr is at 2.65% and down -3 bps. The 90 day bank bill rate is also unchanged at 1.99%.

BITCOIN FIRMS
The bitcoin price is now at US$3,797 which is a +3.7% rise from this time yesterday.

NZD HIGHER
The NZD is also firmer today at 67.9 USc in a 'tallest dwarf' environment. On the cross rates we also up at 93.9 AUc and at 60.1 euro cents. That puts the TWI-5 up at 72.6.

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End of day UTC
Source: CoinDesk

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19 Comments

GCSB bans Spark from using Huawei gear for its 5G mobile upgradehttps://www.nzherald.co.nz/business/news/article.cfm?c_id=5&objectid=121...

hope China doesn't kick us where it hurts?

Big borrowing agriculture needs to ready balance sheets for risks: Reserve Bank
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=121...

The Huawei ban seems generic and looking into the similar directions given in other five eyes countries there doesn't seem to any basis for it, just a suspicion.

I'm also not sure why this applies to 5G gear when Spark are installing Huawei modems in homes. Is there a specific attack vector that they are concerned about?

Internet traffic heading to Australia was diverted via mainland China over a six-day period last year, in what some experts believe may have enabled a targeted data theft.
https://www.smh.com.au/technology/how-china-diverts-then-spies-on-austra...

There have been other attempts. Recently I had an email rejected for too many hops, and some other dodgy stuff that's going on. It's a better way of spying that deploying equipment with potential back doors.

Although rather than 5G I'd be more worried about the chinese robot vacuums that are uploading a map of your house to their server in China. They have the capacity to monitor the entire population of China in real time. Will they extend that capability to the entire world?

Director general Andrew Hampton:

'I have informed Spark that a significant network security risk was identified.'
https://www.gcsb.govt.nz/news/gcsb-statement/

For years while he was in power, former Prime Minister and GCSB Minister John Key actively encouraged our phone companies to use gear made by the Chinese company...

Interesting.

Providing that sort of assistance to the Chinese intelligence community must have been worth the $20m they paid for John Key's house.

At least he got to keep the tennis court. Howdy neighbor!

The Spark boss appears to be captured as well.

Good decision but a bit late. How many Just about every house has a Huawei modem from Vodafone, Spark etc. Labour and National both have suspicious people among them like Jiang Yang and Raymond Huo. There are plenty of CCP sympathisers working within NZ organisations leaking IP.

They've been taking water in chch from a well they drilled illegally and the govt looks the other way.

The elephant in the room they've been accumulating at least a 1% of NZ properties for the last dozen years with toilet paper money.

Let's just hope NZ doesn't sign up for infrastructure loans.

Granted most of this happened under Sir Rt Hon Chong Kee but clearly Labour is the new boss same as the old boss.

Regarding a new Maori bank, does anyone know what the issues with historical credit reporting are? - “Relaxed LVR standards aren't enough they say, pointing to problems with historical credit reporting that colours current ability to service a loan.”

I guess if you didn't pay your bills on time in the past your credit history might cause the banks to now look at your loan application with other than rose tinted glasses?

I’m not Maori. Do you think I could still bank with them?

do you feel Maori?

Not at the moment.

More foreign investors have breached laws to buy residential property in Victoria than in any other state, new figures show. And a growing problem with “front people” has been revealed, particularly elderly Australian citizens buying property on behalf of foreign investors. Victoria has seen 877 breaches in foreign investment regulations since 2015, according to a report by the Australian National Auditor’s Office
https://www.domain.com.au/news/victoria-is-the-top-spot-for-foreign-prop...

"GE GE, -1.85% was one of Wall Street’s major share buyback operators between 2015 and 2017; it repurchased $40 billion of shares at prices between $20 and $32. The share price is now $8.60, so the company has liquidated between $23 billion and $29 billion of its shareholders’ money on this utterly futile activity alone. Since the highest net income recorded by the company during those years was $8.8 billion in 2016, with 2015 and 2017 recording a loss, it has managed to lose more on its share repurchases during those three years than it made in operations, by a substantial margin."

https://www.marketwatch.com/story/misguided-share-buybacks-are-hollowing...

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