Here's our summary of key economic events overnight that affect New Zealand, with news that is all bad.
Wall Street is ending the week in sell-off mode, compounding the losses and making buyers in the yo-yoing earlier in the week look irresponsible. The S&P500 is down -2.7% on the day and falling in mid-afternoon trade. For the week that is a cumulative fall of huge -13% dump. For the month of March it is down -20%, and since the peak on February 20, it is down -31%. We are down to levels last seen at the beginning of 2017. (But an unwinding of the gains in the past decade are at risk, and that would drive the S&P500 down another -50% and unstitch the whole fabric of modern valuations, credit risk, and asset prices. No monetary policy action could weight against that.)
(Wall Street's selloff comes after ignoring European equity markets which made good gains overnight to end the week, up about +4% on the day (except London, England). And yesterday Asian markets also rose with Shanghai up +1.6% and Hong Kong up an enthusiastic +5%. Small gains of about +1% were also posted in Australia and New Zealand.)
In the minute-by-minute battles in the liquidity trenches, the NY Fed has supplied US$67 bln in repo funding so far today. Yesterday, it was US$88 bln. So far this week it is US$609 bln of activity with the most, US$206 bln, on Tuesday alone. Some of this is rollover of course so not all is net-new, but much of it is. They had to put out another Statement earlier today saying they are now up for another US$½ tln in ongoing support.
And they put out a Statement saying they are going to buy US$100 bln in mortgage-backed securities in the coming week.
The NYSE dive means asset backings are highly dubious and liquidity has dried right up. There are sellers, many forced, but no buyers without the Fed. Even though the Fed will bail out the largest financial institutions, widespread bankruptcies and closures look across the whole US as the shutdowns spread fast.
In a now somewhat pointless look back, we should note that US home sales were firm in February, up more than +7% from a year ago. It's only history now. And the more so because American home mortgage rates turned up suddenly in the past week and that will stifle many March housing sales and buyer sentiment.
In Canada, sudden unemployment is at crisis levels.
In Britain, it is so sudden and so extreme, the Government there is promising to pay wages of laid-off workers up to NZ$5,000 (£2,500) per month. That is sure to cause a cascade of layoffs as employers had off the liability to the taxpayer.
In Australia, landlords are under extreme pressure to give rent relief, possibly up to six months deferral of rent payments. It is a development that will unstitch investor returns in residential and commercial property, potentially causing a valuations crash. Australia also raised its debt ceiling by +25% to AU$800 bln.
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The latest compilation of Covid-19 data is here. The global tally is now 263,000 of officially confirmed cases, up +90% in a week. There are now 181,800 cases outside China and almost all of them are in five core countries. Italy is up +6000 in a day and up more than 3 times in a week, Spain is up +2000 in a day and up 5 times in a week, Germany is up 4500 in a day and up 6 times in a week, France might be plateauing but is still up 4 times in a week, and the USA is up by a factor of 12 times in the week. The rest of the world is up 4x of reported cases on one week. The global official death toll now exceeds 11,000. Eleven new cases of COVID-19 in New Zealand have been confirmed in the past 24 hours, bringing the total number of cases here to 39.
Parts of the developed world are now in complete shutdown.
In Australia, they are saying most of their Covid-19 cases are coming in from the USA.
The UST 10yr yield is falling again and still on its wild rise. It is now at 0.95% and similar to this time last week. But in between it hit a high of 1.27% and a low of 0.68%. Volatility like this is rate in this core benchmark yield. Rate curves have moved sharply positive as short term rates have collapsed. Their 2-10 curve is much more positive at +59 bps. Their 1-5 curve is also more positive at +36 bps. and their 3m-10yr curve has blown out to +90 bps. The Aussie Govt 10yr yield is now at 1.07% which is a net rise of +4 bps over the week. The China Govt 10yr is up +5 bps in the week to 2.76%. The NZ Govt 10 yr yield is very sharply higher, now at 1.48% and a weekly gain of +28 bps.
Gold has risen +US$9 overnight to US$1,481/oz but is down -2.4% since this time last week.
The Fear & Greed index we follow is still at the 'extreme fear' side of the dial. The VIX volatility index is now at 62, and although that is down from 69 last week, it is up from 17 three weeks ago and reflects the fear in the financial markets.
US oil prices are sharply lower overnight at just on US$23.50/bbl with the Brent benchmark just under US$29. These represent another -23% drop in a week as demand growth prospects vanish and an almost -50% dive in two weeks. The US rig count is falling sharply now, down -20 in a week and the second largest weekly fall in more than a year. It's probably all downhill from here. Layoffs in theUS poil patch have suddenly ballooned into the tens of thousands of workers. (Incidentally, the modern low was 404 in May 2016. Previously it was as high as 2026 in 2011.)
The Kiwi dollar is ending the week lower and now at 57.1 USc. That is only a -c fall from this time yesterday but it is a -5.8% devaluation in a week. On the cross rates however we are unchanged since this time last week at 98.2 AUc. Against the euro we are softer by -1c for the week at 53.6 euro cents. That means our TWI-5 is now at 65 and a +2.9% devaluation in a week. It has now grown to an overall -10% devaluation over all of 2020 so far.
Bitcoin has risen fast this morning and is now up to US$6,486 which is an overnight gain of +5.5% and a weekly gain of +28%. At today's level it is still -29% below where it was two weeks ago however. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
308 Comments
Lets have a conversation about corporate bailouts
https://www.epsilontheory.com/do-the-right-thing/?utm_campaign=website&…
Thumbs up if you want the greedy property investors who have been pushing up prices and rents at the expense of hard working kiwis to be completely bankrupted by this mess that they have caused... hopefully they will end up renting off their previous renters who have now got a decent chance to buy. Lets see how they like it.... hahaha
https://www.washingtonpost.com/opinions/2020/03/17/china-cared-more-abo…
Watch the realization sweeping the world faster than the Wu Flu itself that the 10,000 deaths (going to how many), the financial destruction and job losses have all been caused by the criminal actions of the Chinese leadership sitting on the virus for more than 1 month.
And then ask yourself why we had article on Interest yesterday by Rewi Woodford praising China for its firm management of the virus.
China is no where near out of this virus mess yet even with their draconian enforcement methods, They have just as many new cases (+39) as we have in total. China still has 6,569 infected people with 2,136 serious critical cases with 3,248 deaths due to the coronavirus.
Link world meter coronavirus cases: https://www.worldometers.info/coronavirus/
https://www.bbc.com/news/health-51963486
Coronavirus: When will the outbreak end and life get back to normal?
There's no easy answers out there.
Make no mistake - we are AT WAR WITH CHINA and that war has just become more vicious and protracted with the release of Coronavirus. New Zealand and other countries need to realise this and actively pursue alternative FTA's with the USA, the U.K. and Europe. NZ is in for a rough ride. It may not be a shooting war - yet - but a war nonetheless. The only concern following from that is if China is pushed too far a shooting war will result a la Japan in the 1930's when they were starved of raw materials. There is nothing new under the sun, but none of this is any reason to soft-pedal on China.
That’s crazy talk. Without China we are screwed on many levels. Manufacturing and production of most industrial and consumer goods has disappeared from western countries due to excessive taxation, regulatory overkill and social welfare systems that incentivise the avoidance of work. So where are all these goods going to come from then?. The cold hard reality is that western society, ours included, has been self-destructing for decades now. Blaming that on China is a joke. Look in the mirror...
Every year 500,000-600,000 people die from the flu. Only 10,000 deaths so far and most due to pre existing conditions, and they are destroying the global economy for this? We are all marching along like lemmings and being played for another agenda. And we wonder how The Hitlers, Stalins, etc, come to power. Collectively we are so easily manipulated and gullible. We get what we deserve.
Once we are through this, the West needs to fundamentally review it's relationship with China. In particular being far less concerned about offending them if it's in our interest.
Also David, this is a rather sensationalist headline,. The media have a role to play in being proportional and supporting the nation through this, because we will get through it.
I don't think that is wise, markets are the best system we have for pricing in risk. If you shut markets the fear will build with no outlet. You make the crisis bigger and harder down the line and you create even more uncertainty and fear. Just like banks created with artificially low interest rates.
I'm in a drought, shutting down my the market means Im going to have a liquidity crisis, my best option is to sell even if i'm making a loss I can still get out of trades. Then I start again at a lower capital cost, i've done this before.
no but i'm more than happy to sit with hands in pocket, will keep buying lambs, cattle feed is disappearing fast. When it does rain this brown grass will become worthless, there will be a pinch till new grass gets ahead.
Neighbour is feeding out ten bales of baleage a day, has been for over a month and his stock are looking a bit thin, wonder when his nerve gives out?
One farmer up by the mountains has spent over a 100k on feed and it's now a worse situation than when he started.
Grain Markets
Oil is cheap and many consumers aren’t driving anywhere at all. Ethanol demand has plummeted, and ethanol futures stand at all-time lows. It’s likely that a lot less corn will be routed to gas tanks, leaving more for other uses. Corn is likely to remain cheap, even as the price of dried distillers grains climbs. This week corn futures touched multi-year lows. May corn settled at $3.4375 per bushel, more than 20ȼ lower than last Friday.
The soy complex moved higher. May soybeans closed at $8.625, up 17.75ȼ from last Friday. May soybean meal climbed $25.70 to $325.20 per ton. Soybean values have fallen far enough to attract some Chinese purchases, and those may accelerate in the near term as China tries to stay ahead of snarls in international trade. Last night an Argentine mayor closed the nation’s key grain port. It’s unclear if the port will remain closed given a national outcry, but fears of such closures are surely rippling through the global supply chain.
We're still not at the bottom yet. Wait till the home guard gets deployed in the US and a while lot of itchy trigger fingers 20 year olds of limited brain capacity are concerned about their own safety let loose. That's when the You Tube, snap chat, and other social media kick in with videos.
We've seen how the US military acts in other countries, that is how they are trained and it is how they will react under pressure.
Videos of people on the likes of Skid Row dying on the streets.
This maybe a bit doom and gloom but we are going to see at least some of this televised around the globe on You Tube etc.
Yeah that's about the bottom of the market.
Imagine what would happen if the property market was closed for a month. That would be 24% of our economy that would suddenly halt. If the cure kills the patient it's not much of a cure.
They closed the market in the Philippines and when the market opened it gapped down 24%. You see when people want out because they need money to feed their family and they can't sell that creates additional urgency to sell when the market opens. I've even saw the results of panic buying at my local supermarket yesterday, adding to the panic never helps.
I don't think much would happen if all property transactions stopped for a month. The gamble is that the share market will show more confidence because a month of quarantine will have resulted in us having controlled the virus. Shares are not particularly widely owned in NZ outside of KiwiSaver and some older folk so there wont be a mad rush to sell shares to buy food, that's ridiculous.
You are just trying to marginalise what I have stated. A gap down in the stock market here would make things worse. People are already confused by the kiwisaver accounts dropping, and those that do understand have and will be moving from equitities to cash.
In relation to needing money you are ignoring the fact the people are now out of work and I've been getting reports of businesses where sales have suddenly gone to zero in a week. Everyone still has bills to pay and few people have a cash buffer. People will get increasingly desperate.
While you want to take a gamble with the markets you are not thinking about the likely consequences.
You should instead consider that markets are just pricing in the change in the environment, and will continue to do so. You shouldn't react in fear to the normal operation of the markets.
It's not a reaction 'in fear' but a reaction 'to fear'. The plan is to allay people's fears, by looking at the results of a total quarantine for a month, and then reopen society's institutions. People shouldn't be trusted to make any decisions at the moment as they are losing their minds and not being sensible.
Something that is quite critical to understand is if the country shuts down for a month once the economy restarts things won't return to what they were before. There will be permanent damage. There's already going to be permanent damage but there is the risk of causing a lot more and scaling up the absurd panic behaviours we are already seeing.
Maybe, I dunno, probably needs to be discussed and fleshed out at a high level. However it occurs to me that your suggestion that people will all be moving their Kiwisaver accounts to cash is the same thing as freezing their share values, locking in their loss. The international nature of shares probably makes my idea unfeasible I guess.
People are absolutely locking in their losses. They will also have no set entry point for when to reenter the market.
When we see the big moves in the US that trigger moves here in the local market, especially in the last couple of weeks they seem to be triggered by rules based funds. For those a market closure would just delay an inevitable sell off which would be large. When I look at the buy/sell orders here you often don't have to sell a large amount to cause shifts in the market. Best to flatten the curve on the market by allowing trading.
Even if we control the virus in NZ, we'd still have to keep the borders shut. Which means tourism and international education are goneski, and permanently reduced GDP. On the bright side, we would have made a sizeable dent in housing unaffordability and transport infrastructure deficits.
"Maybe all stock exchanges should be shutdown and everything financial frozen until we get a grip on this crisis"
FYI, there are a whole lot of derivatives based on stock market indices, and individual company shares - such as listed options, futures, OTC options, total return swaps, 3x levered ETF's, structured products, etc. The notional value could well be in the many USD billions if not USD trillions.
If stock markets were closed for a certain period of time, then there are potential implications - margin calls, cash liquidations, cash settlement, etc.
Ronin Capital.
If markets were closed then they could not have sold the portfolio.
https://www.cnbc.com/2020/03/20/clearing-firm-ronin-capital-unable-to-m…
Here is an instance where the market has effectively shut for investors. Investors in these open ended investment funds are now unable to sell.
https://wolfstreet.com/2020/03/20/ten-real-estate-mutual-funds-suddenly…
Here is another example from 2019 before the recent volatility in share markets
https://www.thisismoney.co.uk/money/investing/article-7574293/Woodford-…
Exactly. Dunno why we're trying to trade through it as if normal, as in place trades. We're all in it together so imposing a shutdown seems logical to try and crack it. I guess here they're trying to strike a balance with allowing business to operate but with restrictions like the customer register for cafe contact tracing. It's trying to ease the pain rather than go hard up front.
The tragedy is that we let ourselves become financially vulnerable though numerous poor decisions, Im putting the RB at the top of the list, now we get the monster from Wuhan and we have no powder left. I think the job losses and the time frame are going to overpower any thing the govt can do, but don't worry AirNZ got their bailout.
https://www.epsilontheory.com/do-the-right-thing/?utm_campaign=website&…
But we were too weak to face up to the fact that the only reason we were 'Rockstar' was because of lowering interest rates and increasing debt, as well as mass immigration.
I think inflation targeting as a way of 'doing economics' might not be the way forward. Just means you keep lowering rates to achieve a level of inflation, while ignoring facts about how productive your society actually is.
Time to make hard decisions. What have we got that is in demand and can sell profitably? NZ citizenship. The world is full of desperate people and some of them are wealthy so why not auction citizenship - the govt would make billions (quite unlike our current system where tertiary education providers make tens of thousands).
Guess a difference between people coming here to work/study vs giving citizenship.
What we did allow was many foreigners to buy up our houses use cheap debt, that now leaves us with some of the worlds most expensive houses, in what is likely going to turn into a debt crisis...
It is certainly a worldwide central banking created problem. Bunch of numpties, totally oblivious to the behaviour of the sector they are supposed to be regulating. No clue after decades of hands-off regulation even though the master said this last time;
https://www.theguardian.com/business/2008/oct/24/economics-creditcrunch…
Too late now. I hope they all lose their shirts as well in the mayhem they have created.
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"In Australia, landlords are under extreme pressure to give rent relief, possibly up to six months deferral of rent payments."
If that was to happen here, or more extreme: if it was forced, I would imagine that many landlords would prefer to leave their properties vacant in the near future. To sell now and get a good price may be very very difficult.
Rents were going to collapse in a recession anyway. Everything we do involves risk, Central Banks tried to take that risk away by actively suppressing interest rates and allowing interest only mortgages, making this collapse much worse. People need to pay what is an affordable rent, not %50 + of their net wages, that was never going to be sustainable.
Yep. The LLs that have little to no debt will likely drop their rents to what is affordable by their tenants - a pay-what-you-can approach. Those who borrowed the lot on the basis of unrealised capital gains on the rest of their portfolio will sell down the portfolio until such time as their bank is satisfied with their equity position.
Unless we find a miracle treatment for the virus soon.
"Those who borrowed the lot on the basis of unrealised capital gains on the rest of their portfolio will sell down the portfolio until such time as their bank is satisfied with their equity position."
There are a large number of highly leveraged property investors who potentially face financial stress who could be looking to exit in a short time when there are few active buyers.
Look at GFC in 2009, when there were few buyers, and vendor's properties were listed for sale for months.
It could be even worse this this time due to reduced willingness or ability to visit and inspect houses for sale due to the coronavirus.
Yep. Good for FHBs, provided there is not a total liquidity crash worldwide. If I were a FHB no matter what amount my deposit was (in other words as prices slump the deposit requirements will be lower as well), I'd be getting pre-approved now. Even if it is pre-approaved for say a $250K loan as there will be opportunities at that price point soon (if you can get finance!).
Good number of home owners will be looking for an exit too. Too much mortgage debt, school fees, loss of income through job losses and reduction in hours. For example, gyms closing And sports cancelled so fewer trips needed for physio visits. Physio then struggles to meet monthly outgoings.
Will property prices fall much? Property prices won't fall by much, people are told.
These are some reasons given in the mainstream media, property market commentators, property market promoters, bank lending promoters masking as bank economists, real estate agents, property market mentors & other sources as to why property prices in Auckland will not fall by much and that there is a low probability that property prices will fall dramatically:
1) during the GFC, house prices in Auckland fell only 7-10%
2) over the past 50 years, house prices in Auckland have averaged 7.2% per annum (or commonly referred to as house prices doubling every 10 years). This trend can be expected to continue into the future - https://youtu.be/Agp9xFWoBX4?t=172
3) there is a shortage of underlying housing in Auckland, so property prices won't fall by much - https://www.interest.co.nz/property/97513/auckland-councils-chief-econom...
4) there is a growing population which means that there will be more demand for houses - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but-...
5) we have inward immigration which means more demand for houses
6) Auckland is an attractive city with an attractive lifestyle - that makes it desirable and attracts foreigners to move to Auckland and hence raise the demand for houses
7) lower interest rates are supportive of rising house prices
8) lower interest rates make debt servicing easier for borrowers
9) Low interest rates were also forcing retirees and those nearing retirement to look for investments that would produce income, such as rental property. "Plans of the baby boomers to retire and live off a conservative yet well-yielding portfolio have evaporated with low interest rates," he said. "[They] are seeking assets and buying investment properties. They are also seeking assets they can hold and live off of for three decades in retirement rather than just 15 years given advances in health and medicines." - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-auckland...
10) we mustn't forget either the vested interests in ongoing stability. No government, central bank or trading bank with mortgage exposure wants materially lower house prices. Nor does an incumbent Beehive want falling house prices going into an election campaign https://www.stuff.co.nz/business/110499233/think-house-prices-are-going-...
11) the economy is doing well, with low unemployment - https://www.stuff.co.nz/business/110499233/think-house-prices-are-going-...
12) there has been insufficient construction of new builds to meet the housing shortage - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but-...
13) there are high construction costs to building a house. House prices cannot fall below their construction cost. - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but-...
14) people don't sell their houses at a loss - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but-...
15) continued inflation means that house prices will continue to rise in the future
16) The fact is, debt levels have barely changed from the beginning to the end of those 10 years, compared to GDP levels, compared to household assets, compared to household disposable incomes. And much more importantly, debt servicing is very much easier now, an item that is almost universally overlooked. We are not pushing out to unsustainable levels now, and even if they creep up a little, we are far from that point. https://www.interest.co.nz/opinion/95894/if-you-think-new-zealands-house...
17) in aggregate household debt servicing is low in New Zealand - currently at just under 8% of disposable income of households - https://www.rbnz.govt.nz/statistics/key-graphs/key-graph-household-debt
18) property market participants & commentators who have been correct in their predictions about recent property price trends have more credibility and hence their predictions of upward prices are believed by a wider audience (such as Ashley Church, Tony Alexander, Ron Hoy Fong, Matthew Gilligan, etc). - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-auckland...
19) previous warnings about a house price crash have been wrong - property prices have continued rising upward significantly since these warnings were given, so there is little reason to believe these warnings.(such as Bernard Hickey) - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-auckland...
20) its unlikely Auckland prices collapse. I think the main two reasons though are:a) Affordability has been this bad, and worse, in the past and it only resulted in about a 10% drop. b) The number of homes built over the last decade has been too low and will take some time to recover - https://www.interest.co.nz/property/100670/housing-market-continues-hibe...
Summary of property price forecasts in light of coronavirus:
1) Bindy Norwell CEO REINZ
what we can do is look to recent examples for guidance.
The Global Financial Crisis (GFC) was obviously global in its nature, so provides us with some reasonable comparatives. Looking at the data from that period showed us that in the first 12 months after the GFC started, median house prices across the country fell 5.9% year-on-year. Whilst the recession technically lasted till June 2009, prices began rising again after January 2009. In the year ending January 2010, median prices increased by 9.4% and were sitting $10,000 above where they were in January 2008 when prices started falling. This really highlighting how (relatively) quickly the market can recover from times of economic uncertainty.
https://www.oneroof.co.nz/news/bindi-norwell-things-are-changing-daily-…?
2) Tony Alexander
Will prices now fall, rather than rising as we were expecting just two months ago? In tourism hotspots the answer is almost certainly yes. These locations like Queenstown and Rotorua
In the main centres however, things may be less bad. Turnover will slow as always happens during a recession, and there will be downward pressure on prices. After all, during the Asian Financial Crisis of 1997/98 average NZ prices fell by 6 percent as the economy shrank 1 percent and the unemployment rate rose 1.7 percent to a 7.9 percent peak. During the 2008-09 GFC average house prices fell 11 percent as the economy shrank 3 percent and the unemployment rate rose 3.4 percent to 6.7 percent.
In the five years after the Asian Crisis average NZ house prices rose by 45 percent after rising by 24% in the three years preceding the recession. In the five years after the GFC average prices rose by 24 percent nationwide with Auckland ahead 58 percent, after prices rose just 14 percent in the past three years with Auckland ahead only 2 percent. Hang on in there is ultimately the message.
https://www.oneroof.co.nz/news/37708
3) NZPIF executive officer
NZ Property Investor Federation executive officer Sharon Cullwick agrees that it’s hard to predict how the situation will unfold, but she too didn’t have a particularly negative outlook for the market.
https://www.landlords.co.nz/article/976516486/what-coronavirus-means-fo…?
4) Nick Gentle IFindProperty.
“When it comes to property, I think many people will sit on their hands for a bit and the housing market will flatten out for a while.
https://www.landlords.co.nz/article/976516486/what-coronavirus-means-fo…?
5) Property panel
https://www.nzherald.co.nz/property/news/video.cfm?c_id=8&gal_cid=8&gal…
6) ASB economist
ASB has predicted house prices will drop 0.5 percent in the next quarter and 1 percent the following.
Overall house price growth is forecast to be zero by March next year, instead of 5.3 percent as previously expected.
https://www.rnz.co.nz/news/business/412028/drop-in-house-prices-and-sal…
7) Core logic economist
"But, even so, I doubt that house prices will fall very far.”
https://www.landlords.co.nz/article/976516486/what-coronavirus-means-fo…?
8) ANZ economist -
"ANZ economists expect house prices to fall 3.5 per cent this year – but say the drop could be nearer 10 per cent, as the impact of a global coronavirus-driven downturn hits New Zealand."
https://www.stuff.co.nz/life-style/homed/120414372/more-economists-warn…?
I’m hoping the antibody test will be available in the next few weeks. Involves a pin prick type test which will confirm if you have coronavirus antibodies in you blood. If yes, you’ve had the virus.
https://youtu.be/He0TYPm3Prg
Problems starting in Queenstown now with rentals-jumped from approx. 20 a week ago to over 120 now,as short term rentals flood the long term rental market.As people in related industry are laid off or are leaving in droves,20% discounts,rent holiday being used as incentives to keep tenants.Unfortunately a lot of leveraged owners totally reliant on tourist dollar to service debt.Ironically rents are now more inline with the rest of country.....but no one to rent them.
Wow, the narrative sure changes quickly. Just a few days ago we saw investors mocking DGMs for missing out on making the massive money investors have from housing. Now it's veering towards pleading poverty and asking to be throught of as benevolent providers of a public good.
Bit jarring.
Landlords proclaiming they are social benefactors remind me of the pissed up blacksmith in Pirates of the Caribbean "Just doing my social duty m'lord"
All it's about is the capital gains and frankly that ship sailed about the same time as the "(insert a multitude of different names here) Princess" with their Darwinian evolution confirming cruise passengers.
Hasn't it dawned on us yet?
The Good Life that we've had the luck to enjoy for the past 70 years - is over.
A new economic and financial structure will emerge from this current turmoil, and I just don't see how it's going to be a variety of 'Capitalism; Business as usual".It won't be millions of individuals all running their own little wealth-building empires.
Socialism ( I can feel the shock and horror pulsing though the bodies of fellow posters now as I write those words! But it's pretty much what we have now - ordering certain business activities to 'cease or else', but larger ) must surely be the way for the foreseeable future ( UBI; Government 'bailouts' followed by assumption of the carcass etc etc etc).
It's not Doom and Gloom - but it will be difrerent.
I don't see it that way, but of course, that could be right. I don't think that what we have had for the last couple of decades is Capitalism. That got lost in time many decades back. If that's what you mean by 'Socialism' I agree. But Collective Effort is coming.; doesn't it always after any war? That's' how I define Socialism.
Which is all we've ever had. Knighthoods, barons, new kingdoms, corporations given free license/reign to pillage and plunder, revolving doors between banking and govts., QE. Giving the right to banks to freely create credit is crony capitalism. But, hey, socialism caused this.
Thought we went through this the other day?
capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
Again, no continued growth in resources inherent in the definition and we shouldn’t change definition to suit our agendas.
No I didn’t state that at all. I gave you the definition of profit as well which makes no mention of your perpetual growth issue.
You have to seperate the monetary system we use from the other concurrent systems we are running. That is where the need for exponential growth and increasing resource use is coming from.
So we've never had capitalism then, or socialism for that matter.
Top down authority sounds the same as it ever was. Emperors, kings, church - corporations, governments, banks. Out of control central banks was allowed by our current concept of "capitalism". Socialism to preserve capitalism. Note, they're all concepts we've accepted as truths.
5000+ years of ruling ideology, a minority ruling over the masses. Economics was developed to fit into the ruling ideology without questioning it, that's not science.
Capitalism, communism, socialism never created anything. It's always been people and what we've created has been influenced by the ruling ideology.
BW, I agree; Socialism or at least a caring society with safe guards for it's people can work and does work for the most part in places like the UK, Canada and Europe. It's when governments use it to massiveness control their populations that's when Socialism gets a bad reputation, prime examples China and North Korea they are more dictatorships then anything else. Which is a real shame because it stops countries like the US from progressing in their social care reforms.
Paying people to produce kids started a lot earlier than 30 years ago. Boomers were "paid" for.
https://teara.govt.nz/en/family-welfare/page-4
" In 1946 universal family-benefit payments replaced means-tested family allowances, and each mother received some money each week to spend on her children. This meant that all families with children under 16 were now part of the social security system. They were well supported relative to other beneficiaries. Between 1945 and 1960 parents living on a mid-range wage with two children would receive through family benefit payments and income tax relief about 50% of what a single old-age pensioner received."
1946, that is 74 years ago... so yeah, unless you are over 74 then you are part of the "problem".
You don't think that paying solo mothers to bang out kids didn't create intergenerational families that relied on benefits?
Seriously I don't mean to cause offence but it was a bad call.
I remember girls when I was at school saying they were going to get knocked up and go on the benefit and then get another on the way.
"I remember girls when I was at school saying they were going to get knocked up and go on the benefit and then get another on the way."
Just out of interest, what area of NZ was this?
I don't recall the DPB being a career option at my school's careers evening, or by the careers counsellor (LOL).
im happy for you to go first. I have always recognised there is value in your comments, my behaviour has changed, i'm pretty much self sufficient, my farm inputs have collapsed with no drop in outputs. I still use a little diesel but economically.
I just think capitalism is the lesser evil. Welfare has created perverse incentives.
But individuals responding to those perverse incentives were minor in the greater scheme of global finance and the situation we find ourselves in. Just how minor they were is evidenced by the widening income gap the world over. The Walton Family and Walmart as a corporate entity was the one taking advantage of those perverse incentives offered by the welfare state in the US ... a whole HR department dedicated to the task of explaining/helping their employees to fill out the forms in order to qualify for food stamps and other assistance given the low level of wages they paid.
Same goes for WFF in NZ. Would not have been needed if wages reflected the needs of workers. When they didn't - the government stepped in. The real beneficiary of the welfare initiative was not the proletariat.
Welfare as a safety net was abused by the corporate sector, not necessarily the people.
Indeed we have had that inter-generational welfare problem since the Lange/Douglas reforms. But again, in the greater scheme of things, it isn't the core welfare problem - low wages (and the wholesale move of Western corporates to even lower wage economies) are at the root of the problem. But, then it's just my impression.
Socialization of the losses.
Bank derivative books and the carry trade, sure.
However
What to do here?
https://i.stuff.co.nz/national/health/coronavirus/120423822/coronavirus…
I will be surprised if u get any likes on that. I expect to see SFM has headed off to Hawaii soon.
Trying to understand the BS from the palace on how the Queen says she is doing her bit (by fleeing to the hills) Surely this was her moment to copy the Queen Mother during the blitz who refused to leave London as she "wouldn't be able to look the Cockneys in the eye"
Virus or no virus she doesn't have long to go. She is an ideal head of state for New Zealand - firstly not a Kiwi and secondly half a world away and full of the experience of age but not carrying as much baggage as the average celebrity. When she goes do we carry on with well meaning Charles or use the process for selecting the Dalai Lama (a select group of priests chose a random baby and claim divine inspiration). Whatever we do it has to be better than selecting a Kiwi (President Winston, President Jacinda, President Simon even President James Shaw would eventually get up my nose and he seems ideal).
Is Simon allowed in the media? "Ximon" seems a bit rich given Jacinda shut the border with China but didn't. Did border control take it upon it upon themselves to continue to allow in Chinese businessmen after the border was closed - or were they under instruction?
And would that also bring a war time leader?
"Our pandemic plan always sits at the ready, but we've really operationalised in response to Covid-19 at the beginning of January."
"We need to add that layer of reassurance that this is the kind of situation that New Zealand is well prepared for and that we have an excellent health system."
This all 2 March.
https://i.stuff.co.nz/world/119933091/coronavirus-government-to-conside…
And 18 March
https://i.stuff.co.nz/national/health/coronavirus/120387141/coronavirus…
Heres the because.
Take time to read this.
This appears to be the path NZ is taking, we seem lock step in with Australia, albeit Oz a couple of weeks ahead.
https://www.smh.com.au/politics/federal/building-a-bridge-over-the-nati…
A chasm is opening in what we'd always assumed to be the solid ground of Australia's health system, commercial system and social structures. It's opening faster and deeper than the authorities foresaw.
The federal and state governments, up-front but mostly behind the scenes, are working together at a frenetic pace to build a bridge of emergency measures to bring as much of Australia across as possible.
Australia's authorities are now racing to bring it under control, to maintain a functioning economy and to keep social order. As of this week, the authorities expect that the rising number of infections will peak in late April or early May.
It will be an even more sombre Anzac Day than usual, a moment to reflect on the centrality of national resilience - how much we've retained and how much we've lost.
On the current trajectory of growth, the authorities anticipate that Australia's intensive care hospital system will reach capacity around that time and remain at, or beyond, its current limit for about two months. This is the chasm opening up in the health system.
Is this satire..?
He seems sincere, not opportunistic... https://youtu.be/kePvZkV-Zcs
Bridges is now clearly out of his depth. He's pathetic. Notice that when push comes to shove in a crisis; the pathetic fall away ( e.g. Neville Chamberlain, Winston Peters, Shane Jones, Judith Collins, Paula Bennett, Simon Bridges, John Key, all the Greens, to be replaced by the cream (e.g. Winston Churchill, Franklin D Roosevelt, Michael Cullen (although not exposed to a really bad crisis in his career, I believe he would have led the charge.), Jacinda Ardern, Keith Park (millenniums will have to google him, he is a NZder who almost single-handedly saved the world from Fascism.)
just seems the other day we were talking about ANZ selling houses to executives at a four million dollar discount,and greg foran knocking four apartments worth 9 million together to make a super penthouse.now looks like the working poor are taking a hit to keep that going.
A large segment of the poor exploit the taxpayers from middle NZ just as much as the obscenely rich. Baby-farming to multiple fathers in South and West Auckland gives the female an ongoing life-style where she doesn't have to work and can leach off the taxpayer forever; to top it all off the fathers get away without paying a cent to bring up the children because Labour has now absolved the mothers from having to name the fathers. Who let this get out of hand?
My understanding is that the Australian government will simply pay the rent on behalf of unemployed tenants, thus guaranteeing the income of the land -lord. Any compulsory six month rent holiday would make every single rental listing on trademe instantly vanish at a time 80k New Zealanders are coming home
Hi Aj,sad to hear no relief from dry yet,we are green down here in Southland-but it is cooling down quickly & feeling like autumn already.Alot of farmers here are still in catch up mode for winter feed due to cold wet spring/summer,floods etc.Are you able to off load stock & has the schedule improved since crashing in new year.
I have lambs going in the morning. It is becoming a bit of a record breaker, I have enough heavy country by the river to keep my lambs going. I was at the Fielding sale yesterday, it was a waste of time, South Island agents were buying up everything. Manawatu is brown. They have been buying lambs for a few months, they should have waited top lambs only made $90 yesterday and bottom was very strong too with smaller lambs making $75, which makes no sense, but often the best stock are the cheapest.
We are looking at no rain probably until mid April, i am oversowing with italian rye, which I'm hoping will give me some winter feed, when it rains. I went and spent 17k on an Aitchison Moore direct drill, the ground is hard, I have wound it as far down as I can and it's working pretty well at the moment, disk drills are amazing machines. I have never tried this before, I also have some crop which is waiting for rain.
One risk is meat works close, I see in the USA Trump has made them an essential industry so they will keep going, however I suspect the works here would be happy to shut for two weeks. PGG agent told me there is a wall of stock about to hit the market as we get into April, with no rain and lower temperatures. The vista around here reminds me of Otago. We had light ground frost in patches this week.
My daughter is telling me we have to be more careful of this Virus as everyday the risk is nearly double, so yesterday the risk was a lot lower than today which is a lot better than tomorrow.
Good to hear you can still move stock,hardly any prime stock getting killed here-it is mainly cull cows which is being turned into mince & burgers for the US.Like you our biggest concern now is if our Dairy Factory was to close-we are atleast a month behind our North Island mates & we need to supply well into May.Remember you are another day closer to rain & we all a day closer to conquering this virus.We Farmers know all about self isolation- we live it every day,hopefully our efforts are recognised & are rewarded as we the Agricullture Sector farm our country out of recession & create wealth for all to enjoy.
I was more interested in getting back to the old bakers wheat from long ago, it appears easier to digest. I thought if I could do 20 tonnes a year it would be a start.
I was planting some winter crop so I added a kg of both swedes and Khale, if nothing else I will have a lots food for the community this winter, if it rains that is. ( Swedes and Khale are small seeds a kg goes a long way.)
Hipster? Show how out of touch you dumbo. Bread used to be made from only salt, water, flour, starter (yeast)- what white crap loafs are you buying in the super and you think that is bread? Better still try making a loaf in you self isolation and home delivery over the next 6 months will become the norm especially for the compromised.
Soughdough - hipster ..still laughing at that one...
Update cannot keep up with demand , especially hotcross buns. Teaming up with milk deliveries already in place and adding eggs from supplier vas well. Might send you a starter kit dumbo...bread is easy to make at home..hower you would probably struggle as seem to think it's old fashioned.
As a kid we used to go to the Storfordlogde sales yard and buy a pen of 10 for $10. They weren't flash, a couple would die and a few of the others would produce a lamb and we built up from there. We only had room for 15 or so. It was a cheap way to start a flock for home use.
It's certainly a breath of fresh air overhearing the mundane goings-on of the farmers that really 'bring home the bacon'. What a change from my so-called leafy Auckland suburb surrounded by Asian-owned units converted from 2 bedrooms to three bedrooms (by converting the dining area to a bedroom) and then stuffing them all with tenants. And then having to shop at the local P'N'Save and have a Chinese woman waiting in the checkout queue behind me openly sneeze directly at me without blinking an eyelid.....fortunately, I have come out unscathed.....no plague.
As I'm 72 yo I'm now in imposed self-isolation. Been thinking nostalgically of my childhood days in the 1950s.....when in the old Morris 8 we often used to visit relatives on farms in the weekends: Hoteo, Ramarama, Huntly. Great times. I'm now convinced that society has regressed since then.
If I didn't have family ties I would gladly retire to the country.
“unstitch the whole fabric of modern valuations, credit risk, and asset prices”
Therein lies a major part of the problem - all the fiddling and economic pumping by the Central Banks over the past years created severe distortions which ultimately manifested into acute vulnerability - there was always going to be something to unravel it
And, unsurprisingly - all along the way, the majority of Joe Public cheered them on.
What has caused significant cognitive dissonance for me post GFC has been the use of LVR controls with each interest rate drop. For me, I would have been increasing LVR for residential property with every OCR drop. Its those with large volumes of debt who will fail in the coming months, but they only taken on that debt because interest rates were lowered.
It was debt that got people in trouble during the GFC (was living/working there at the time so watched it first hand) - yet we've repeated the same again and expect different results? Absolute madness.
The current market isn't beyond the realms of normal forecasting, S&P500 touched about 3 standard deviations ahead of its average long run growth rate in February. When we have regressed to trend growth I expect support for the market will materialise.
In economic terms I am more concerned about other countries wasting time and not taking the spread of the disease seriously yet. If the only way to get complete alignment between government, industry and citizens is a serious body count they may get what they need very shortly.
It's time NZ government starts look internally.. get big think projects underway..re deploy, train, get some return on investment. Throwing money into benefits won't help with what's coming. The fall out on society, unemployment, crime, domestic violence, mental health, suicide will make virus look like a mild headache. Need give people some light or the fabric of society will fall apart.
And that's the mounting risk that all Government now see.
Unemployed, desperate, hungry peoples' fight each other.
They look at the Greener Paddock over the borders and want to take it.
Look at the hoards of refugees ex-Syria for a case in point. They can be kept under control at the moment by stability and their powers.
When stability is gone; looking after its own problems, that's when all Hell breaks loose.
The US is potentially facing a 7-8 fold increase in those filing for unemployment this month. That is staggering. Some are reporting 2.5 to 3mn in intial jobless claims - potentially 1.5 to 1.8x the entire population of the largest city in NZ, Auckland.
Then there are early projections of the same number again for next month.
So in 2 months, the number of those filing for unemployment in the US could be greater then the entire population of New Zealand.
There will be a rapid rise in unemployment in NZ. Will the percentage increase be similar in NZ?
Apparently 14% of those employed in NZ are either directly or indirectly employed in the tourism sector.
USA has a population of around 329,000,000. So while those numbers look large to us with a population of around 5 million, the size and scale of USA needs to be kept in context.
8.4% of those employed are employed directly in tourism. https://www.tourismnewzealand.com/about/about-the-tourism-industry/
Some informed, calm comment from Chris Smith on RNZ this very morning. Main takeaway for me: tests undertaken early in the virus-evolution in a person can be negative: test again in a week and it's raging. Has to do with nose/throat swabs not being as useful early on: the bug is nestling deep in the lungs, not yet higher. False negatives, in other words.
And yet our Gubmint continues to parrot 'no community transmission....'
I'm surprised you referenced that, Waymad.
Main takeaway for me was the comment about overpopulation and overuse of the planet. And that this was inevitable given how hard we are pushing nature. That we have to change or.....
Anathema to a cornucopian techno-optimist, I'da thought.
From the Korea data we should protect the population >60 years old. For starters send non-essential >60 year old staff home. I think it is criminal teachers >60 are still expected to expose themselves on a daily basis. Will Worksafe kick in?
"Clearly, the impact on elderly and immunocompromised individuals is severe, with nearly 90% of total deaths coming from individuals 60 and over. But these data do not call for shutting down all public and private facilities given the extraordinarily low rates of death in the population under 50."
https://www.hoover.org/research/coronavirus-isnt-pandemic
Has the government acted on this yet? The military must have a stash somewhere surely.
"U.S. President Donald Trump says the drug Hydroxychloroquine has been approved by the Food and Drug administration and will be available for prescription immediately."
From 2005 - "We report, however, that chloroquine has strong antiviral effects on SARS-CoV infection of primate cells. These inhibitory effects are observed when the cells are treated with the drug either before or after exposure to the virus, suggesting both prophylactic and therapeutic advantage."
https://virologyj.biomedcentral.com/articles/10.1186/1743-422X-2-69"
As usual there is a lot of flapping of mouths and words keep falling out. It's just a confidence boosting statement. However there isn't enough hydroxcholorquine available for use as a treatment on any scale.
Remember that Trump is an idiot and you need to listen to experts instead.
The experts who sat on 2005 studies. The experts who condemned Trump for wanting to close the border with China. The military is prepared to go to malarial countries. It is a generic drug that production can be ramped up. Instead let's do nothing and virtue signal how Trump is an idiot. So boring.
Great virtue signalling chaps. You are so caring and kind. Now you can virtue signal abut Israel too.
"Teva Rushes to Bring Malaria Drug to Coronavirus Patients, Drugmaker to donate more than 10 million tablets to hospitals, Mylan, Bayer also increase production of decades-old treatment"
https://www.bloomberg.com/news/articles/2020-03-20/teva-rushes-to-bring…
That's nice but that's only a tiny fraction of what would be needed for treatment on even the scale that New York is going to need. Ignoring the other 49 states.
On the upside the production is good assuming that it will actually be an effective treatment. The one positive thing I've been seeing is that businesses are willing to step up and help rather than being selfish in the US.
"...assuming it will actually be an effective treatment." You don't need to assume - try reading some of the papers and the recent completed trials.
This is a far faster solution than the vaccine that will be a year away. Only needs to be targeted at people >60 - as those are the ones that are dying. From the Korea data <50 years are just inconvenienced carriers.
I'm not making assumptions. There needs to be substantial evidence which does not exist. The US is certainly going to trial it.
Here's Trump's press conference about it.
https://www.vice.com/en_us/article/k7eymx/trump-just-argued-with-his-to…
Vice - really? I can see now why you have a severe case of TDS. If you spent less time virtue signalling and more time reading you would know evidence does exist and has done so since 2005.
"Remdesivir and chloroquine effectively inhibit the recently emerged novel coronavirus (2019-nCoV) in vitro"
https://www.nature.com/articles/s41422-020-0282-0?fbclid=IwAR2JbbZU_Hl7…
"Breakthrough: Chloroquine phosphate has shown apparent efficacy in treatment of COVID-19 associated pneumonia in clinical studies"
https://www.jstage.jst.go.jp/article/bst/14/1/14_2020.01047/_article
"A recent controlled clinical study conducted by Didier Raoult M.D/Ph.D, et. al in France has shown that 100% patients that received a combination of HCQ and Azithromycin tested negative and were virologically cured within 6 days of treatment.
In addition, recent guidelines from South Korea and China report that hydroxychloroquine and chloroquine are effective antiviral therapeutic treatments for novel coronavirus. "
https://www.covidtrial.io/
Can't use the link now, google has locked it up - but you get the drift.
"The study is presented by Thomas R. Broker, (Stanford PhD), James M. Todaro (Columbia MD), and Gregory J. Rigano, Esq., in consultation with Stanford University School of Medicine, UAB School of Medicine, and National Academy of Sciences researchers.
The paper concludes: “Chloroquine can both both prevent and treat malaria. Chloroquine can prevent and treat coronavirus in primate cells (Figure 1 and Figure 2). According to South Korean and China human treatment guidelines, chloroquine is effective in treating COVID-19. "
If you set aside your bias in relation to Vice and click on the first short video of the press conference you'll see that Trump's medical advisor is cautious about making claims. Which is understandable as there is not enough clinical evidence to support the claim.
The recommendation in the first paper is to carry out a clinical trial. The second has an abstract recommending inclusion in treatment. I don't have an issue with it being trialed which I indicated previously as if it works that is good (and the likely negative side effects aren't as bad as dying and if it works it could free up limited hospital resources).
Auckland hospital and others here in NZ & Australia are looking to start trials. https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12318588
Bavaria in Germany (12.9 million people) is now under curfew.
Starting from midnight, leaving one's own home is only permitted with good reason. For example, necessary shopping, going to the doctor or to work. The police are required to check that the curfew is observed. In the event of a check, the good reasons must be substantiated by the persons concerned, according to the general ruling.
Starting from midnight, additional establishments will be completely closed. These include all catering establishments (take-away, drive-in and deliveries are still permitted), hairdressers, DIY stores, garden centres. Visiting hospitals, old people's homes, nursing homes and facilities for the disabled will be prohibited (with a few minor exceptions).
However, grocery stores and banks will remain open
Sport and exercise in the open air are still permitted. However, only alone or with members of the own household (family, flatmates). Other group formations are prohibited. The restrictions come into force from Friday 20 March midnight and apply initially for 14 days.
Ben Hunt
@EpsilonTheory
"His pay package includes a $2 million annual salary, $7.65 million in a cash bonus, and $17.85 million in performance-linked stock units."
Burn. It. The. F*@. Down.
https://www.cnbc.com/2020/03/20/goldman-sachs-ceo-david-solomon-gets-a-…
It is Goodman Fielder (owned by Wilmar International, Singapore) who has protection under DIRA.
People have a choice of which brand they buy, though most Foodstuff stores in the South Island don't stock Fonterra milk. Fonterra often isn't the cheapest, so you don't have to buy it as there are alternatives.
It's no different to the meat in supermarkets - beef and lamb isn't cheap to buy outside of specials. But we don't hear people complaining about the profits the meat companies are making and taking offshore, at the expense of the NZ consumer.
I'm getting the impression that a sincere and optimistic free-market capitalist has a lot in common with a sincere communist.
"It'll work, you see, it's just no one has tried it properly yet."
Capitalism is far superior but it needs protection to prevent it becoming crony capitalism.
Time for national show some leadership,labour only knows how to increase benefits. Couple mistakes
1. Raised min wage.. should been delayed as those affected are those employed by business that will be hardest hit by this virus.
2. Why increase Winter payment, everyone needs and will have to scarfice to protect society during this time including the retired.
3.increasing benefits for non productive part of society makes no sense. Need to pour money into infrastructure get non productive turned to productive.
As anger builds the election is being dished up on a plate for Bridges.
We won't stop this virus they just trying slow it until vacine canes out, so prepare now,.. China has lot to answer for
FCM, many tens of thousands of people from all walks of life are about to lose their employment. You would deny them a bit of extra assistance? The massive voluntary economy is shutting down. Many on minimum wages depend on holding down two or more jobs. One or more of these jobs is disappearing. Tens - no, hundreds - of thousands of people are going to be quarantined at home. There will not be infrastructure projects employing thousands - community transmission will see to that. The benefits packages - basic as they are - have good reason. It's called caring for our nation.
Who pays for that,..the productive workforce..or does government just borrow borrow borrow.. which may get harder and harder....you can't just turn whole society into non productive workforce...they have mortgages etc.. leveraged of full-time work, you take that away the benefit won't cover the outgoing, be better to invest in big projects and try get them retrained and employed
I am not sure you have the UK response described accurately David. My reading of it and what I have heard this morning from my brother who is in hospo there is that it is an 80% wage subsidy, a bit like the wage subsidies here. If you get laid off, you don't receive 80% of your former salary.
Thanks China. Those wet markets are hell on earth and health experts had been warning about the risks for years. And then the CCP tried to hide the virus initially, costing the rest of the world valuable time. I’d honestly be thrilled if Trump decided to give the Orwellian evil empire that is China a good dose of “freedom”.
The US needs to decouple to keep its top spot while it still has the economic leverage to do so. If/when this advantage is lost and China continues its ascent, who knows what international ambitions the CCP may want to pursue. And I’m not thinking niceties like Belt and Road.
I for one am hoping that COVID-19 accelerates the great decoupling, instead of distracting from it.
Breaking news: the virus is out of the bag as we have community transmission with two cases. One in Auckland and one in Greater Wellington Region.
https://www.stuff.co.nz/national/health/coronavirus/120464350/ministry-…
E: press conference by PM due at 12pm. As people have suspected additional restrictions are likely to be announced this weekend.
We're on an alert level system now. At the moment it's work differently and cancel unnecessary travel, which is what most people have been switching to this week.
https://www.stuff.co.nz/national/health/coronavirus/120465788/live-prim…
In the minute-by-minute battles in the liquidity trenches, the NY Fed as supplied US$67 bln in repo funding so far today. Yesterday, it was US$88 bln. So far this week it is US$609 bln of activity with the most, US$206 bln, on Tuesday alone. Some of this is rollover of course so not all is net-new, but much of it is. They had to put out another Statement earlier today saying they are now up for another US$½ tln in ongoing support.
In respect of today's $500 billion 84 day RP operation, only $31.25 billion was bid and accepted. Much the same response witnessed for the two previous $500 billion 84 day offers, where a total of $95.40 billion was bid and accepted.
This is exactly the same indifferent dealer response witnessed at the RNBZ TAF auction, yesterday.
Are dealers really short of liquidity or collateral to participate or both? Whatever, these "bazooka" liquidity windows are not facilitating resolution of either issue. Indiscriminately ramping up illiquid bank claims to central central bank balance sheet reserves needs to be reviewed to determine it's relevance.
View the latest FED TOMO/POMO operations here. The POMO total since 17/09/19 is ~$608.64 billion.
Peak Prosperity
I wonder if workers can refuse to go to work over the next few weeks and not be punished?
I can live without my salary however I can work mostly from home but I do get asked to visit customer's offices. Can I refuse to venture out, at least over the next few weeks?
I am in the let's face and charge the virus camp howver my wife isn't. Also I want everyone to try the one month's quarantine first before we go 'over the top'.
Many workers can work from easily if their tech is up to spec. The biggest historical limitation was ski by networks monopolized by old Telecom, who put profits ahead of society (sounds familiar mr banker). Govt intervention in the form of UFB has changed that problem.
"We are down to levels last seen at the beginning of 2017. (But an unwinding of the gains in the past decade are at risk, and that would drive the S&P500 down another -50% and unstitch the whole fabric of modern valuations, credit risk, and asset prices. No monetary policy action could weight against that.)"
Quite possibly the best thing that could've happened to us. That fabric was already torn and we've been trying to hold it together for too long with QE, interest rates, inflation, property prices, and more credit. It's obvious the values aren't real so why do we keep trying to force them as if they are?
Anyone here have any info what the RB is doing regarding supplying the main line banks with relief after their capital and reserves, excluding depositor funds, are depleted? Is this when the RB declare an OBR event? Does anyone think this is a real probability in the next 6-9months? I've attempted to analyse the RB's dashboard but its at too higher level see exposure to residential, farming and commercial loans. The credit concentration is somewhat of an indicator on exposure
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