Here's our summary of key economic events overnight that affect New Zealand with news we are in the shadow of tomorrows US Fed rate decision. There almost certainly will be a rate cut, but the size of it is still in doubt. Place your bets.
Meanwhile, today's dairy auction was a relatively tame affair, largely delivering what the derivatives markets signaled. But AMF and butter slipped, with the rest of the powders and cheese all rising about +3%. But there was more of the weak milkfats in this auction than normal so the overall price rose only +0.8%. In NZD terms it was similar. There will be little to shake farmgate payout forecasts in this event's results.
And staying local, we should note that there is another electricity crunch underway this morning from 7am to 8:30am. Prices are under pressure as you would expect.
Elsewhere in the US, the data released overnight delivered another set of positives. August retail sales grew when a slip was expected. And July retail sales were sharply revised higher. Last week's Redbook index rose +4.7% from the same week a year ago.
US industrial production rose and by more than expected in August. And that means on a year-on-year basis it is no longer negative.
And their NAHB/Wells Fargo Housing Market Index rose in September beating expectations. This breaks a string of four consecutive monthly declines.
There was a well-supported but relatively small UST 20yr bond auction today where the median yield came in at 3.97%, down from 4.10% at the equivalent event a month ago.
In Canada, their CPI inflation rate fell to 2.0% and back to where their central bank needs it to be. It was a slightly larger adjustment lower than expected. The Bank of Canada next reviews rate on October 23 and there is growing talk of a -50 bps reduction then.
Meanwhile Canada housing starts in August came in lower than expected.
Across the Pacific, Singapore's August exports came in softer than was anticipated.
But India's August exports beat estimates, even if the rise seems minor and overall Indian exports are not large by world scales.
Remember, China is on holiday today.
The UST 10yr yield is now at just on 3.64% and up +1 bp from this time yesterday. The key 2-10 yield curve is now +6 bps positive. Their 1-5 curve inversion is less at -56 bps. And their 3 mth-10yr curve inversion is much less at -128 bps. The Australian 10 year bond yield starts today at 3.89% and up another +4 bps. The China 10 year bond rate is at 2.07%, and unchanged. The NZ Government 10 year bond rate is now just under 4.13% and up +0.3 bps from yesterday.
Wall Street traded with the S&P500 down -0.1% from yesterday although it hit an intraday record high earlier. Overnight, European markets were all up about +0.5%. Tokyo ended its Tuesday trade down -1.0%. Shanghai did trade due to the public holiday. Hong Kong was up +1.4%. Singapore was up +0.6%. The ASX200 ended its Tuesday trade up +0.2% but the NZX50 fell again, down -0.3%.
The price of gold will start today at US$2566/oz and down -US$15 from yesterday's high.
Oil prices are up +US$1 at US$71.50/bbl in the US while the international Brent price is now just under US$74/bbl.
The Kiwi dollar starts today at 61.8 USc and down -10 bps from yesterday. Against the Aussie we are down -20 bps at 91.6 AUc. Against the euro we are down -10 bps at 55.6 euro cents. That all means our TWI-5 starts today at 69.4, and down a minor -10 bps from yesterday.
The bitcoin price starts today at US$60,835 and up +4.9% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.3%.
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60 Comments
It will likely be a capacity issue (is there enough plant available to meet peak demand) rather than an energy one (is there enough potential energy available in the hydro lakes, gas pipeline, coal stockpile at Huntly etc to cover our requirements overs weeks, months etc) hence why this has occurred despite healthy lakes and coal and gas supply. Likely driven by one or more unplanned outages which will have restricted the amount of plant available to produce the amount of MW we might need on a cold morning like today.
I was watching my solar generation ticking up this morning. Generation started at 6:30am and I had covered my usage and was exporting to the grid by 8am. Im in Wellington and only have 3 panels that really catch the early morning sun but I have been plesently surprised by how much the generate early morning even on overcast days.
Some ironic timing with this article. I mean why would we want to try and reduce demand for electricity?
https://www.rnz.co.nz/news/political/528262/added-insulation-costs-smal…
More than 98 percent of responses supported increases over the previous standards in the shortest time possible, MBIE said.
"Compare that to the largely anecdotal stories minister Penk seems to have relied on as a basis for wanting to roll the new standards back," Geddis said.
They found costs were much lower when the architects and designers worked out heat loss from the whole building to see whether the design as a whole complied with the rules
So people will be forced to spend $10k on extra design fees, to save a few $ in insulation costs? Right.
The design fees are already there. When we did work on our house the architect had to calculate the insulation requirements. You would think it would just be a standard for residential (use this R rating of batts etc), but he had to calculate it all including total window area etc. I think this also leads to using concrete pads instead of houses on piles, which isn't so good with climate change and flooding!
The building code forces us to spend money on calculations instead of actual product, and its not just insulation: in NZ Gib can be used as bracing, the architects use the Gib website to calculate bracing, but the calculations only apply when using their product. In most other countries I believe they just have proper rules for bracing in the code.
You clearly didnt read the article. Your architect did the calculations, most don't. Most just apply the individual elements building code requirements. Here's the rest of the paragraph
They calculated the added costs for building two real-life home designs complying with the 2023 standards, versus complying with the old standards, including labour and materials. They found costs were much lower when the architects and designers worked out heat loss from the whole building to see whether the design as a whole complied with the rules, rather than treating each part of the building separately.
Costs were much higher when they simply copied the minimum insulation values for each individual part of a house (windows, walls, roof) and put it all together in a house - currently the most common method of meeting the standards.
So you paid the extra design costs to do the calculations, and now everyone else will as well.
You miss the point.
Insulation is a permanent saving, over the life of the building. And the lifetime of every building henceforth, transcends the end of fossil energy availability. What do you think that will do to energy availability, whether reflected in 'cost' or not?
You are only comparing up-front 'costs'.
Jstt like the third world the diesel genset cranks up in the morning.
https://www.transpower.co.nz/system-operator/live-system-and-market-dat…
Who peddled ECONOMIC GROWTH within a system which needs to burn fossil energy to maintain its level of activity?
All parties - greens included, but BOTH bigger ones, is the important point.
Let's keep an eye on the bigger picture, eh? Let's while we're at it, challenge those who laud said ECONOMIC GROWTH while avoiding addressing ramifications in proportion - many of whom claim to be journalists.
The facts are clear: fossil energy is finite. It will therefore peak (I suggest it has) and decline - we will collapse before 'run out'; a system betting on GROWTH cannot long survive forced degrowth.
We will end up on renewables - more accurately described as rebuildables. And we will be doing orders-of-magnitude less, on them. Which just might take the other pressures off the planet - likely too late to keep parameters within human-supporting bounds, though.
How do you think your comment fits on that backdrop? I'd say 'too small of scope'.
By "economic growth" do they mean real (not nominal) economic growth per capita?
If my house cost 100,000 steak-and-cheese pies 10 years ago, but is worth 100,000 steak-and-cheese pies today, have I benefitted from a real capital gain and am I economically better off?
Great question.
Firstly, your house didn't cost any pies.
Both the house, and the pies, represent energy expended, and materials (call them resources) used. From there it gets complex, and the 2nd Law of Thermodynamics comes into play, as does the other (non-energy) meaning of entropy. The pies probably decayed faster than the house... but both are permanently deteriorating, trending to zero use as items (and presumably of recycling-only value; composting etc)
The society you are part of - both then and now, is the problem. Within it, you may well equate one of something with 100k of something else - but if the whole is dependent on a finite resource (fossil energy, say) and is depleting that resource at an exponentially-increasing rate (2%, say) THEN THE WHOLE IS BECOMING POORER.
Your question reflects the failure of economics, as a discipline, then; it ignores essential inputs/outputs. The word they use is 'externalities'. It is incorrect. Invalid. As is a wealth-token system which also ignores those 'externalities'. The chimera worked during the first half of planetary draw-down - it cannot during the last half.
Go well...
No.
The common denominator of all your posts, is that you miss this point.
Firstly, I did not suggest a 'fixed pool of resources'. Where did you pluck that from? (Assumptions are intellectually fatal).
I'm talking about draw-down and entropy - both of which assert a DWINDLING pool of resources. Add in a presumed claim on that pool, by future generations - ostensibly unlimited numbers of them.
How does a fiat-levered, instantly-keystroked token deal with, or anticipate, that?
The only thing available for consumption is Surplus.
As claims on surplus exponentially increase, we get inflation. Which leads to unaffordability. Which leads to lower prices while base costs remain high.
So Fiat ultimately deals with it by lowering prices to the point capitalism (production) collapses.
We can see it action now ... discretionary spending is the first to go (among the bulk of the population - not the 1% ers)
We are running out of babies far faster than we are running out of energy. Countries like India are building their first fast breeder rather than banning stuff. It isn't even going to be close.
"US nuclear reactors have created 27,000 terawatt-hours of fossil-free electricity since 1951 from 90,000 tons of uranium fuel. Using fossil fuel that amount electricity would have required almost 100,000 times as much coal, 7,800 million tons, and produced 23,000 million tons of CO2."
“Fundamentally, in light-water reactors, out of the uranium we dig out of the ground, we use a half a percent of the energy that’s in the uranium that’s dug out of the ground,” Gehin told CNBC in a phone interview. “You can get a large fraction of that energy if you were to recycle the fuel through fast breeder reactors.”
https://www.cnbc.com/2022/06/02/nuclear-waste-us-could-power-the-us-for…
"Whereas a conventional nuclear reactor can use only the uranium-235 for fuel, a breeder reactor employs either uranium-238 or thorium. In Kalpakkam, thorium (which is abundantly available in India) will be converted into uranium which will be used further as fuel."
https://sundayguardianlive.com/investigation/indigenous-fast-breeder-re…
"The world holds around 1.57 trillion barrels in proved crude oil reserves as of 2023. This is excluding oil sands. Since 1960, there has been a marked increase in oil reserves, especially in the decade between 1960 and 1970."
https://www.statista.com/statistics/236657/global-crude-oil-reserves-si…
"No nation that has had its TFR drop below 2.0 has ever seen it rise back above 2.0.
So, within not too many hundreds of years, and depending on the TFR, there are likely to be less than one billion people alive, and possibly only one-tenth of that, lower than it was 10 000 years ago."
https://insightplus.mja.com.au/2024/8/health-care-in-for-a-roller-coast…
We wont end on so called renewables
More accurately we will end up operating within our solar budget
First check of the day...Gold Apollo pager? Whew, no.
No a good day for company owner Hsu Ching-Kuang I suspect.
AP-900: This what we know about one of the pagers that exploded in Lebanon (trtworld.com)
In a nice wee irony, Trump mentioned it the other day: WW3.
The Israel/one particular race/US tie-up is incestuous, and co-dependent. And there isn't enough planet to allow pretenders into the tent.
As Gaza (and the Warsaw Ghetto heralded; the inhumanity is identical although one actor is reversed), proves. 6-7 billion overshot, in resource terms, means escalating refugee streams, fences, borders, camps, squalor, disease, inability to control... And within the US hegemony, more than 50% are down to gig-work and their infrastructure is disintegrating. And the gig-weary vote for Pied Pipers - the Moseleys and the Mussolinis, the Trumps and Farages, the Le Pens - who promise a joyous land just at hand (MAGA etc). They then have to blame others for the late arrival of euphoria, and that leads to war.
So WW3. I don't think it's an if, anymore. I think it's a when.
Ukraine will avail western long range missiles and strike targets deep in Russia. Russia will retaliate with its equivalents, selectively to begin with, targets likely in the Baltic States, maybe Poland too. That will see continental NATO boots on the ground in Ukraine with capacity to push Russian forces back towards the starting lines of the conflict. The large question then is whether or not Mr Putin categorises that as an existential threat. There you go, who needs Tom Clancy to predict the commencement of WW3.
NATO boots are already on the ground in Ukraine, so we know the answer to that question.
Russia knows Ukraine cannot do the targeting of these long range missiles, that part is done by "consultants" from the country supplying the weapon. So the question for me is will Russia strike back against the NATO country that supplied the weapon directly or indirectly?
Recycling mill in Auckland’s Penrose to close as energy costs rise
Who needs recycling when you could buy a brand new one?
Base material cost per TW
Those panels arent looking so green
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:s…
Good to know coalition appointed commissioner Lester (previous Auckland Transport board chair) is fully focused on fixing health
https://www.thepost.co.nz/nz-news/350418261/part-time-health-commission…
More like a hatchet man
https://newsroom.co.nz/2024/05/14/the-politics-behind-pending-health-ap…
"Levy’s style had radically changed upon his return to the fold in 2009, with what was viewed by many as an increasingly top-down, controlling and destructive approach. In each of the positions, he came in with an embellished assertion that he had inherited a financial mess and was the right person to fix it.
In each of the four DHBs, the chief executives resigned; Canterbury’s David Meates survived longer but almost all the senior leadership team also resigned. Morale also plummeted (less so in Waitemata but dramatically in Counties Manukau and Canterbury). Ironically, following his appointment as their chairs, the three Auckland DHBs went from financial surpluses to deficits."
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