Here's our summary of key economic events overnight that affect New Zealand with news markets are starting to price in the return of US inflation in 2025, and perhaps the end of US Fed rate cuts (although there could still be a last hurrah in December).
In the US, their CPI inflation rate rose to 2.6% in October from 2.4% in September. This is the expected rise but is the first rise in seven months. In March it was running at 3.5%. Energy costs fell in October but by less than expected. Rents rose 4.9%. Food inflation slowed to 2.1% and transportation (airfares) to 8.2%. Prices continued to fall for new vehicles. The closely-watched core inflation rate held at 3.3%.
Given that the new US Administration policies are expected to be strongly inflationary, the US Fed will have a challenge on its hands to retain the gains they have won post-pandemic. But it seems that markets are still pricing the US Fed to cut rates again when they next meet on December 19 (NZT).
After falling in each of the past six weeks, US mortgage applications were little-changed last week (up +0.5%) to be little-changed from the same week a year ago. We probably should note that during all of October, they fell -35% from the prior month. And more falls are anticipated because benchmark interest rates are rising quickly now, in anticipation of a resurgence of inflation in 2025. At least, that is what markets are pricing.
US household debt rose on a gross basis to US$17.9 tln in Q3-2024, half of the increase in mortgage debt on rising home loan rates. Delinquency rates edged up marginally but remain historically low.
Across the Pacific, Japan reported rising producer price inflation, with PPI up +3.4% in October, the highest since August 2023, and the 44th month of PPI gains.
In India, they had record passenger car sales in October, helped by unusually having two major festivals in the month, each with a history of higher consumer spending.
Although it is now slowing, wage cost growth in Australia in the September year was up +3.5%, a cost pressure on businesses that isn't being matched in output prices or rising productivity. It is the expected moderation, but they need it to slow much faster or there will be growing economic issues.
The UST 10yr yield is now at just on 4.45% and up +2 bps from yesterday. The key 2-10 yield curve is now more positive, by +14 bps. Their 1-5 curve inversion is now inverted by only -4 bps. And their 3 mth-10yr curve inversion is little-changed, now by -17 bps. The Australian 10 year bond yield starts today at 4.70% and up +5 bps. The China 10 year bond rate is down -1 bp at 2.09%. The NZ Government 10 year bond rate is up +6 bps at 4.74%.
Wall Street has started its Wednesday with the S&P500 up +0.4%. Overnight European markets were all little-changed at about +/-0.1%. Yesterday Tokyo ended its Wednesday session down -1.7%. Hong Kong however dipped -0.1%. Shanghai rose +0.5%. Singapore was up a lesser +0.2%. The ASX200 ended its Wednesday session down -0.8%. And the NZX50 fell -0.6%.
The price of gold will start today at US$2589/oz and down -US$10 from this time yesterday.
Oil prices are -50 USc softer at US$68/bbl in the US while the international Brent price is unchanged at just on US$72/bbl.
The Kiwi dollar starts today at 58.9 USc and down -30 bps from yesterday as the USD rises further. The inflationary effect will now start to appear on imports because it has fallen -7.5% since the start of October. Against the Aussie we are +10 bps firmer at 90.8 AUc. Against the euro we have slipped -20 bps to 55.7 euro cents. That all means our TWI-5 starts today at just on 68.6, and down -20 bps from yesterday.
The bitcoin price starts today at US$92,520 and up another +6.2% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.2%. The price in NZ dollars has now exceeded NZ$150,000 for the first time.
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86 Comments
In 17th century Holland the pool of potential investors was very shallow. Now potentially anyone in the world with a cell phone can trade with leverage. Belief is nice. Can you touch it? Can you live in it? Can you rent it or hire it? Can you drive it to work or for fun on the weekend?
Will a military force come to defend it if its value is under threat?
And what maths has factored into the current value rise? Trump win+Elon cosying up to him=rise in value?
Bitcoin issuance rate halving back in May 2024, the same halving event that has been followed historically by bull runs that exceed 800% rise in value. The launch of ETFs, and these ETFs buying 3700 Bitcoin per day on average since launch while only 450 Bitcoin are issued per day.
Basic math. It seems Pa1nter that you've sucked up the talking points of the media here and are a broken record on repeat.
10x my wealth in 3 years and about to 10x on that with how this will most likely play out. I'll let you crunch numbers.
It's fine, this is a wealth transfer from people like yourself to those that get it, mostly the younger gens.
You truly believe "headlines" are what has got Bitcoin to where it is today, like the headlines we see on this site as a prime example. Majority of headlines are negative and only post when it's a negative opportunity.
You seem in a loop of logical denial
10x my wealth in 3 years and about to 10x on that with how this will most likely play out. I'll let you crunch numbers.
You haven't told me how much you started with.
It's fine, this is a wealth transfer from people like yourself to those that get it, mostly the younger gens.
Haha, join my club, lest I slight ye.
You truly believe "headlines" are what has got Bitcoin to where it is today
Did you look up those previous parabolic spikes?
How's the AI investing going on?
You don't need to know how much I started with. It's not the dollar return it's the %. Someone increasing their net worth from 5m to 6m isn't a better return than someone increasing their net worth from 50k to 1m.
Yes I have and I'm confident to say I know more about this topic than you. To the point I swear on the bible speaking about it.
Ahh Pa1nter, AI investing? How much 7 sharp have you been watching.
You don't need to know how much I started with. It's not the dollar return it's the %.
No, it's the dollar value. For something to be worthwhile, you have to determine the payoff, and throw the kitchen sink at it.
Making huge gains to the point you're financially independent should be the aim. Crowing because after 3 years you've made enough to buy a used car, isn't much to brag about.
Yes I have and I'm confident to say I know more about this topic than you. To the point I swear on the bible speaking about it.
You have spent a lot of time reading things about it, feel very strongly about it, and are using erroneous spikes in value to validate your thinking.
People do indeed swear on the bible, feel very strongly about it, and try to correlate aspects of their lives as validation of the bibles claims.
How much 7 sharp have you been watching.
Don't watch any mainstream media. But I do know AI was the investment buzz word of the last couple of years. On the ground today, you have very few entities that've managed to find a path remotely close to productivity. There's a few clear encumbents, from the sea of wanna bes.
No, it's the %. Everyone has different numbers for financial freedom. For some it's 1m, for others it's 15m.
Crowing because after 3 years you've made enough to buy a used car, isn't much to brag about.
No need to be condescending, I'm not talking about chump change. You do realize NZ property is falling off a cliff against Bitcoin and has done so for 15 years?
I do know AI was the investment buzz word of the last couple of years
See, this is where you are wrong once again. AI is a buzz word, especially with investment. What has this got to do with Bitcoin that is now 15 years in, continuing to accumulate market share of the financial world.
You seem to attribute Bitcoin as being a fad, but unfortunately for you, it's not disappearing and continues to grow with resilience.
Would you admit you have been wrong if it becomes used for global trade?
No, it's the %
It really needs a dollar value to establish relevance. Otherwise it becomes like a gambler, who wants to tell you how they made $400 on the pokies last night, but exclude the fact they lose $200 every other night.
You seem to attribute Bitcoin as being a fad
I'm not saying it's a fad. I'm questioning how people think the market value is derived.
AI is a buzz word, especially with investment.
About 12 months ago, you held it up as your ticket to chilling on a beach in Thailand.
Would you admit you have been wrong if it becomes used for global trade?
It's already used for global trade. But to solidify it's value proposition (other than being a collectible), we'd need to see Bitcoin being used far more extensively as a means to conduct a trade (outside of Bitcoin for fiat, and vice versa). Over 10 years ago, there was much hype about various online vendors accepting Bitcoin for sales. 10 years later, what percentage of online merchant transactions are settled in Bitcoin?
About a year ago you were on one of your tirades about how the old ways are silly and the system is short changing you (despite the fact you received a decade and a half of free education and healthcare). You were blazing a new path chilling in Thailand living off AI and crypto.
I dont think so. He’a mid-20’s and succeeding with crypto investment while giving us rationale for why. Though less understood by older generations this doesn't make him constantly harp on about BTC as if everything will go to the moon in price. Personally i applaud him for educating himself and having it pay off when society has priced out basics like home ownership for the young. If BTC goes up and up it doesn't lock people out from owning shelter.
Basic math. It seems Pa1nter that you've sucked up the talking points of the media here and are a broken record on repeat.
No disrespect but you're not necessarily using math here. More like pattern recognition - or extrapolating prices into the future using a simple fitting of a line between points. And that's no different to the belief system that P, the media, Ashley Church, and most Aotearoans prescribe to - that house prices double every 7 to 10 years.
IBIT which is Blackrocks ETF, has just hit the $40b asset mark (a mere two weeks after hitting $30b) in a record 211 days, annihilating the previous record of 1,253 days held by $IEMG. It's now in Top 1% of all ETFs by assets, and at 10 months old it is bigger than all 2,800 ETFs launched in the past TEN years. The Tradifi world is taking this very seriously now. Literally they have never seen anything like it.
I hate Bitcoin and think it is the most ridiculous thing ever. However it is becoming something that is part of many investment portfolios, and as that grows it will increase in value. I actually think it is here for the long term and will continue to go up in value unfortunately. Probably at some stage people will realise it is stupid and dump it, but that could be decades away.
I'm in my 40s. Even when I was your age, I've had people think they've found a new shortcut. The losers massively outnumber the winners.
I've given you some basic maths in the past about how to make money, the slow way. Worked out better than 10x by 10x. If your shortcut does better, good for you. But if you wind up still complaining about how rigged the system is in your 30s, don't say I didn't tell you.
In today's rapidly changing world, to "play it safe" is the riskiest thing you could do.
Pa1nter still stuck 20 years ago thinking the world hasn't changed.
Bitcoin isn't a shortcut, it's recognizing a superior asset, especially in the time we are currently in.
I was going to suggest you short Bitcoin since you seem so confident about it, but it seems that would be outside of your risk profile.
I'll take a punt, you put your head down, worked and paid off a mortgage, maybe 2 with renters assisting? Nothing says proud like partaking in the parasitic NZ landlord game.
I wish you luck.
In today's rapidly changing world, to "play it safe" is the riskiest thing you could do.
No there's still risk involved.
I've started, developed, ran, bought and sold many businesses (some even involving bleeding edge technology). Employed up to 100 people.
That's not for everyone, but in liue of that, one can cultivate a develop a set of in demand skills, and build up wealth that way.
Luck had a little to do with that, but you also have to capitalize on that opportunity.
What you're attempting to do, is far more on the luck end of the spectrum.
I can beat that. The library actually got a book in for me as they had none. It was $400 at the time. I couldn't understand anything beyond two chapters as it got too techy for me. Young family, no spare cash but was gonna find $2000 to put in. But I couldn't work out how to.
The rest is history. That said I would have sold at $1k I'm sure!
As you get nearer the end you realise it doesn't really matter. Life ends regardless.
Ha, great line Sqaure. I would use that, but I don't talk about it with people anymore for that exact reason. Friends, family and acquaintances had years and years of me telling them to buy. A few did.
Money and investing is a strange thing for people, they need the reassurance of the crowd. They won't buy $50 of BTC just to see how the process works, but they're happy to borrow a million dollars to live in a run down shack. Because everyone else does it's fine.
Hi safeashouses.
Bitcoin uses electricity as a form of proof of work. To mine Bitcoin and be rewarded, you need to front up energy intensive computing power.
This is often called out as bad for the environment, but it is monetizing electricity. Take NZ for example. From 9pm to 6am we have very little energy demand and being hydro producing, we can produce far more than demand, often forced to if rainfall is normal or high. We create electricity and have no one to use it. Bitcoin mining could be used to monetize that electricity and subsidize the grid. This is being done more so overseas. I believe el Salvador is harnessing power production in locations where it doesn't financially make sense to produce and sell to grid, yet they can produce and mine Bitcoin, bringing income into the state and overall economy.
Bitcoin is a form of monetizing electricity regardless of where it is.
Keep in mind, an EV sucks the same power off the same grid as someone Bitcoin mining, so back to the environmental issue. It does use a large amount of electricity but it isn't the usage that is the environmental concern, it's how that electricity is produced.
Think of the people who don't have bitcoin
Why would I think of them? Bitcoin is global and divisible, anyone can take part. Developing African countries have higher adoption and usage of Bitcoin vs NZ.
I couldn't care less for those who don't have it as there is no unequal opportunity with this, unlike houses.
@21trillion - what about warming the planet - why is houses different? Looks like you feel the same about houses as people feel about you and bitcoin. Hope this is a lesson for you - also i don't care about your justification you taking up valuble electricity to ger rich - old people need the electricity and they cant afford the bitcoin - if you know what i mean
In truth I'm gobsmacked at what BTC is doing, and admit I haven't invested. There is a part of me that wished I had, but when it was affordable and worthwhile from today's perspective, I simply didn't have the spare cash to do so. It appeared high risk. But here are a few thoughts.
BTC has no legitimacy other than a high level of acceptance and belief (isn't religion the same?). It is not real. Its value is based only on demand. It cannot be used for normal day to day transactions. There is no universal register as far as I'm aware and buyers must store their purchases in an 'electronic wallet'. These can and have been lost, passwords lost and forgotten. The dependence of software platforms for trading that are not well regulated if at all makes them highly vulnerable to fraud and theft. Sooner or later governments will take notice if they haven't already as BTC will be used to launder money and fund criminal activities.
15-20x in next 5-10 years if gold returns to its rightful place relative to the money supply in the 80s. Suspect at present that the gold price is being influenced by funds being reallocated to ratty.
Hating on gold seems to be shifting from the tradfi world to a segment of BTC maxis that are known for their zealotry. Will ratty outperform gold? Probably. Doesn't mean you should have 100% exposure to ratty. Mind you, utmost respect for those who are irresponsibly long on BTC.
There's probably no 'rightful place' for anything, from here on in. What we have, is too-many rentiers (folk who want to amass more energy/resource proxy, without using either (without being productive, in other words).
They are also less-than-perfecty informed (indeed I'd use stronger language - they are largely uninformed).
So they will do a passable imitation of lemmings, with about as much foresight. The inevitable wealth-destruction ahead, has to orders-of-magnitude huge (and the Musks of this world are well aware they are dependent on it not happening - they'll empty every societal box in an attempt to keep the unaintainable, maintained. Some of the lemmings will cheer some parts of that (some here cheers reduction of public services) but they are merely demonstrating a blinkered perspective.
Tim Winton's book Juice, is a thought-provoking look-ahead...
Kiwi dollar clocking at all-time lows on the TWI. There might be better gains for exporters on price in the short run but unlikely that they will be able to move much more volume out of the country. Costlier imports (medical, pharma, capital goods, software, fuel, food, etc.) will keep inflation elevated for a bit longer as a result.
Wasn't everything supposed to become cheaper as our population grew? Greater economies of scale putting downward pressure on price is a myth peddled by those benefiting from the country importing more consumers and cheaper labour.
High population growth leads to greater competition among consumers for non-tradable goods and services letting those that control supply to increase their returns. Worse, it disincentivises innovation because duopolies in our main markets see no need to invest new capital to increase their returns or their market share.
Not only that wasn’t efficiency meant to improve too. Computers and the internet have been a fantastic development. The immediate access to and storage of information and communications just for a start. Think how that has replaced the metal filing cabinet and telex machine. Yet the accuracy, integrity and worth of the day to day workaday service out of all of that, to me anyway has got worse. And of course such outcomes are handily blamed on the computer despite the fact that computers only do what they are made to do. Seems to be too many think the computer can do their thinking for them and for instance firing off an email is ob done regardless of what the email says.
One of the issues with computers that gets up my nose is the reliability. Between software and hardware it pretty much sucks. Legacy work can be lost simply because newer software doesn't support it. So knowledge, records, and history can all be lost. The great promise of computers is in part a house of cards, and then there is the need for energy to make them work. When the lights go out, so do the computers too.......
I attended the Chorus shareholders meeting where reference was made to the shutdown of the old copper network. One shareholder asked about rural connections where mobile reception is poor and fibre is never going to be installed. Oblique references where made to other technology. by Chorus (almost as if they were going to dump the old copper networks in less populated area's). I would like to think that the government would setup a separate company to supply services to these more remote areas with contributions from the major telco's.
Seymour says ignore Kings counsel and give everyone a say on the law. free icecream for everyone , I say.
https://www.rnz.co.nz/news/political/533674/senior-lawyers-call-for-tre…
BTC is the biggest pyramid scheme ever. It could be a currency, but no one is using it as that. It could be a store of value, but no one is using it as that. Everyone that buys BTC is doing so in the hope that more suckers will also buy it and it will increase in value. The world is a big place, and the potential size of the pyramid is massive, so there is the potential to become very rich. But keep in mind that a pyramid scheme doesn't create wealth, it just transfers it from the many at the bottom to the few at the top, and you can't be sure when you buy if there will be a greater fool further down the chain than you.
BTC is shaping up to be the most evil thing the world has ever seen, probably more dangerous to human existence than global warming. If it succeeds it will create extreme inequality the likes of which has never been seen before.
"How Many People Own & Hold Bitcoin?
The answer is:
No one will ever know the amount of Bitcoin users in the world. As explained below, there can only be an estimate of the number of people with Bitcoin.
The most common method of estimating the number of Bitcoin owners is to look at the amount held in different addresses.
In 2024, estimates show there are 106 million people who own Bitcoin."
https://bitbo.io/how-many-users/
16 years and an estimated 106 million holders (apt term)....a moderately sized religious faith.
"It is also worth noting that the distribution of Bitcoin ownership is heavily skewed, with a small number of large holders, often referred to as "whales," holding a significant portion of the total Bitcoin supply. As of March 2023, the top 1% of Bitcoin addresses hold over 90% of the total Bitcoin supply, according to Bitinfocharts."
Still prefer Bitinfo for understanding potential owners of BTC. If you own a single Bitcoin, you're in an elite pack proportionally. It used to be a goal to get to BTC1. In the not too distant future, that will shift to BTC0.1.
https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
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