Here's our summary of key economic events overnight that affect New Zealand with news the American middle classes are expecting significantly higher pay and higher costs in 2021.
But we start today noting the IPCC's latest peer-reviewed update, which says there’s already enough greenhouse gas in the air to heat the planet by +1.5°C - which is thought to be a climate tipping point. For New Zealand (page 150), they forecast more rain in the south and west of the country, less in the north and east. They also expect more river flooding, and faster glacier retreats, with them likely to disappear during this century (p 257).
Elsewhere, the latest New York Fed consumer expectations survey for July shows consumer price inflation expectations are firmly anchored at a high +4.8% for the next year. However the same survey reveals households' expectations for year-ahead earnings growth and the likelihood of finding a job, rose sharply in July. Medium-term inflation expectation ticked up to +3.7% in three years. While remaining elevated, home price growth expectations declined to +6.0% over the coming year. Across the board, Americans expect to pay sharply more in the coming year for everything, and but expect their pay to rise only +2.9% to match that. While such surveys rarely work out with these signals, these expectations do strongly affect how people plan and react.
There is some evidence Americans may be underestimating their pay prospects. The latest JOLTS survey (for June) shows there is a surge in both job openings and quits, suggesting that labour shortages are still getting worse. While the acceleration in payroll gains in recent months suggests that is not proving as long-lasting a drag on hiring as some had feared, that is in part because employers have increased wages more rapidly than anticipated. Tighter labour market conditions will likely put more upward pressure on wages over the coming months.
China's consumer inflation came in marginally higher in July than expected, but still lower than for June. Retail prices for pork, beef and lamb are now all falling on a month-on-month basis. But their factory sector reported PPI up at +9.0% which was also higher than expected and matching the 13-year high reached in May. This is real pressure in a core component of the world's supply chain.
Analysts have noted that the weekend release of import data from China shows that copper imports fell -10% in July. That has brought a sharp retreat in the copper price today.
In Taiwan their exports rose at the same fast rate in July as they did in June. A moderating of growth was expected but hasn't happened yet. Taiwanese exports are a stunning+38% higher in July than the pre-pandemic July 2019 levels. Taiwanese imports also stayed high, indicating strong trading activity.
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German export data for June was released overnight and they reported their 14th consecutive month of gains. Those export gains rose more than expected and were despite persisting supply bottlenecks. Germany depends on export demand and this gives another positive view of world trade at present even if German exports are only up +2.3% above June 2019 levels.
There were 285 new community cases in NSW yesterday with another 170 not assigned to known clusters, so they are not getting on top of their outbreak. Victoria is reporting eleven new cases. Queensland is reporting 5 new cases with some in Cairns. Overall in Australia, more than 22% of Aussies are fully vaccinated, 44% have now had at least one shot.
Canada has opened its borders to fully vaccinated American travelers - but the Americans haven't reciprocated yet.
Meanwhile, the city of Beijing has canceled all large-scale exhibitions and events for the remainder of August, the latest sign of economic disruption due to the fast-spreading Delta variant. They are sticking to their elimination strategy.
Wall Street has opened marginally lower in Monday trade, down -0.1% in afternoon trade. Overnight, European markets were quiet and mixed around +/- 0.1%. Yesterday, Tokyo finished up +0.3%, Hong Kong ended its session up +0.4% and Shanghai starred, up +1.1%. The ASX200 ended unchanged after giving up earlier gains. The NZX50 ended down -0.5%.
The UST 10yr yield starts today at 1.32% and up another +1 bp since yesterday. The US 2-10 rate curve is to now at just on +110 bps and marginally steeper. Their 1-5 curve is steeper at +72 bps, and their 3m-10 year curve is also a bit steeper at +128 bps. The Australian Govt ten year benchmark rate starts today at 1.22% and unchanged. The China Govt ten year bond is at 2.89% and up +6 bps. The New Zealand Govt ten year is now at 1.63% and also unchanged.
The price of gold took another hit overnight dropping right out of favour and down a further -US$33 to US$1730/oz. This time last week it was at US$1811/oz so that is a weekly retreat of -4.5%.
Oil prices are lower by -US$1.50 from this time yesterday, so in the US they are under US$66/bbl, while the international Brent price is just on US$68.50/bbl.
The Kiwi dollar opens today just on 70 USc. Against the Australian dollar we are little-changed at 95.4 AUc. Against the euro we are unchanged at 59.6 euro cents. That means our TWI-5 starts today still at 73.2 and still in the narrow range of between 72 and 74 we have been in for ten months now.
The bitcoin price has taken another step up is now at US$46,395 which is a gain of +7% from this time yesterday. Volatility in the past 24 hours has been very high at just under +/- 4.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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156 Comments
Smells more like a convenient excuse to me. 90% is a huge proportion. It's the union or some cock up like not making the vaccine available to them at work.
Govt and MOH have had since Feb to detect this issue and sit down with reluctant border workers and the union and figure it out.
Instead they just made a rule from on high and pushed the can down the road until at least October. Incredible lack of urgency.
Seems to me someone isn't keeping things in proportion. We are in deep doo-doo, probably headed for species extinction. Ours. You think a few slower ship-unloadings really matter?
And the joke is that the IPCC is only measuring the exhaust, not the dwindling level in the tank.
I dunno, at the moment the survey is at 32 thumbs for getting jabbed and 18 for some form of hesitancy. That seems like a fairly high level of hesitancy, certainly enough that it would be difficult to reach herd immunity if interest.co.nz in representative of the general population.
No. But does the rest of the population trust the authorities more or less than us? I don't know the answer to that, but suspect it will be less.
Looking at the results in round numbers, we will have a team of 4 million and another team of 1 million. That's going to be a real test for the government to manage.
NZ-wide power 'emergency' leads to outages in Waikato
Start allowing new hydro dams and FFS get digging for natural gas, not Indonesian coal. Link
See first item. We have enough gas for the foreseeable future. We need to push forward with renewable s, plus a smarter consumer network, that allows for load shedding. Last night showed the problems with heat pumps, in freezing weather they are not much better than resistance heaters
Yeah but luckily things are getting ambiently warmer, so no worries, eh?
Makes you wonder where it all goes; all those brand new utes end up as stranded assets. All that debt (I'm still waiting for DC to list debt with all the opti-hype) goes unrepaid. How long does belief (in money, in growth) hold?
We are living through what was long predicted, now, but what I didn't anticipate was the dissonance of POVs. Our narrative(s) are all over the place.
Why stop at 20 deg? Let's go full Venus (surface temps 470 deg, ~97% CO2 atmosphere, possibly due to runaway climate change events) and we can just go outside with coal and it will spontaneously combust.
I don't think many people realise that there isn't really an upper limit with regards to how hot it can get. We are all worried about a 2 deg rise, but how would you like a 10 deg rise or a 50 deg rise if things really get away on us... at some point it's unliveable and we simply won't survive and that point is far below the bounds of what physics says is possible.
Yep, good ole inter-glacial warming. "We show a persistent and widespread increase of growing season integrated LAI (greening) over 25% to 50% of the global vegetated area, whereas less than 4% of the globe shows decreasing LAI (browning). Factorial simulations with multiple global ecosystem models suggest that CO2 fertilization effects explain 70% of the observed greening trend, followed by nitrogen deposition (9%), climate change (8%) and land cover change (LCC) (4%). CO2 fertilization effects explain most of the greening trends in the tropics, whereas climate change resulted in greening of the high latitudes and the Tibetan Plateau. LCC contributed most to the regional greening observed in southeast China and the eastern United States."
https://www.nature.com/articles/nclimate3004
Which is fantastic. But CO2 levels are still rising, the fertilisation effect is a known positive feedback mechanism. But it does NOT mean we don't have to worry about CO2, because eventually the effect will plateau or reverse as other factors affect plant growth (soil quality/temperatures/aridity etc). Overwhelmingly those that study it find that it isn't anywhere near enough to mitigate the climate change drivers, hence we sea ocean acidity increasing and increased average temps.
Profile,
I knew I could count on you. Those in the know and you are clearly of that number, are well aware that climate change is a dastardly plot hatched by the UN and its shadowy backers-Soros, Gates, probably the Rothschild's-and why? World domination of course.
I urge you to keep revealing The Truth. All these so called climate scientists are in the pay of someone. The Keeling Curve is an invention and those behind this are so cunning that they even managed to fool the oil companies over 30 years ago into believing that climate change was real. Perhaps you are one of The Anointed right here in litttle NZ! I will be right behind you when you seize power.
I await your definitive 'proof' that there really is a pizza shop where Democrats sacrifice children.
FAO’s forecast for global cereal production in 2021 has been lowered marginally since the previous report in June to 2 817 million tonnes, but still 1.7 percent (47.8 million tonnes) higher than in 2020 and would mark a new record high.
http://www.fao.org/worldfoodsituation/csdb/en/
Next time they need to pull supply due to shortages do it in Wellington, that'll get their attention. Outside of the election cycle Waikato might as well be another country as far as politicians are concerned.
Could we run a cable to a developing country and outsource our emissions problem to them? It worked for raw materials and manufacturing.
Today much of the research has answered your questions and the new designs are taking them into account. The molten salt ones look very good, and safe. We should be using technology to provide solutions for the past failings. Tectonic issues can be just as easily mitigated as well.
North of Auckland is tectonically stable. Close to our largest power consumer Auckland, easy access to some decent sized rivers for cooling, and obviously have contingency plans by building is strategic locations. Nuclear power is the future of the world, not this bullshit "renewables" crap that is far from renewable in terms of resource extraction, and being unable to actually produce enough energy to allow for the building of more renewable energy sources.
https://www.epa.gov/radtown/radioactive-wastes-coal-fired-power-plants
If we're worried about nuclear waste we should shut down huntley right away given that coal creates more nuclear waste than nuclear.
A large battery array might be sufficient in these circumstances? We had a shortage of generation capacity for a brief time and couldn't bring additional online fast enough. These could be sited closer to demand centers (e.g. Auckland) to avoid issues with transmission capacity limits too.
Not at all, 99% of the time they don't need to charge during peak demand, we just need some very simple tech and pricing to manage that.
Also its theoretically possible that EV's could have been supplying power to the grid at that time. I would certainly have allowed my theoretical electric car to pump power back into the grid at peak and then have it charge off peak overnight assuming the power company paid me appropriately. Or they could have cut off my connection and I could have run our house off the car. Why have pumped hydro when every house will probably have a huge battery before it even gets built.
Hi Jimbo. Good stuff. Have you heard anything about the Quasar V2H 7.2kwh bi directional charger being given the tick off for NZ? Charge back into the grid at peak times in the dark. $4,000 US a bit pricey. I haven't got solar yet but only a small system would charge a 62 kwh Leaf on most days in Hawkes Bay
With our large, low density country it would be easy to locate a reactor to minimise any potential impact. In the history of nuclear power there have been 3 accidents. Hydro dams have killed more people https://en.wikipedia.org/wiki/Dam_failure
Nuclear is the best form of energy available to human kind. But good luck trying to actually educate people that have been brainwashed. Liquid salt reactors are actually solids at room temp, so if something does go wrong, a hole in the floor opens up and dumps it straight into a pool of water, problem solved.
It comers down to planning and risk mitigation, and making sure the back up plans have back up plans.
There is currently 443 nuclear reactors operating around the world, needs to be more.
Yes, all nuclear waste from power generation has been encapsulated and stored right back in the ground where it came from. It is all tracked and accounted for. Not like fossil fuel emissions which are just pumped in to the atmosphere and allowed to dissipate to anywhere they like.
have you looked at LCOE of nuclear? without massive capital subsidies from taxpayers?
Whilst I'm personally not against it for supplying a baseload for Auckland, it's a moot point - it will never fly in New Zealand unless a massive social upheaval precipitates it.
I'm more for a distributed solar approach for charging interchangeable batteries and hot water heating.
.
Car manufacturers will have to standardize on battery design like the ubiquitous 9kg gas bottle but I'm not holding my breath on that one.
Ask the thousands of students who live in the city centre, one of the interations of the University science building was supposedly designed to possibly accommodate one.
Would I want one next door? No. Would I want a coal fired station next door? No. Do I drive a diesel car? No. If you have to make me choose between them, I'd take the nuclear station every time - but then again I'd happily buy an apartment above a race track if I could.
I read this recently from another Interest post:
https://newatlas.com/energy/seaborg-floating-nuclear-reactor-barge/
a) it floats
b) it almost totally removes the waste issue at end of life
c) negligible impact if it melts down
Food for thought?
spot price hit $223,000+ /MWh
https://www.emi.ea.govt.nz/Wholesale/Reports/W_P_C
My solar sends four times as much out the gate as comes in. (in winter 2x)
And each of those little sparkles I send along the wire means another couple of litres stays in Lake Pukaki.
A government with nous, (yes I know) would build on that imperfect assistance by allowing a networked distributed generation system. Where neighbourhoods could be more self sufficent.
Probably better than dumping billions into some panic stricken mega scheme.
What? Urbanise wild environments? like building towns does? its a giant puddle of water, doesn't sound very urban to me.
Wreck ecosystems, yes, just like absolutely everything that humans do does, but its the tradeoffs you have too look at.
Pollute visually?? I quite like a nice dam, but i guess you are opposed to electric lighting as well, that's a pretty potent type of visual pollution.
Limited life, everything does. But please, tell me what the average life span of a hydro dam is in comparison to wind turbines or solar panels? Oh, and what happens to all those wind turbine blades after they are done with them... https://www.bloomberg.com/news/features/2020-02-05/wind-turbine-blades-…
Plus of course, if the sun doesn't/isn't shining, or the wind isnt blowing.....They are immediate use. Hydro is storage over time.
I take it you are a proponent of Nuclear energy then? the obvious best choice.
I thought 1 butcoin = 1 butcoin so it doesnt really matter if you can sell it for 1cent or $1B does it?
Also to be a Bear you need to have theories on market conditioning negativly effecting the price. For the thousands of Cryptos floating around, they are no different to stamps or baseball cards, Im not a Bear or Bull on those either, but at least they dont pretend to be a currency and think one day they will take over the world.
Good luck with ya cryptos, one thing they will always be able to buy is some of the emperors new clothes
Liquidity pools don't involve borrowing/lending.
https://medium.com/geekculture/we-need-to-talk-about-liquidity-pools-in…
The income is generated from taking a cut of trades that you are providing liquidity for.
No. The coins are added to a smart contract, and I have ownership of a share of the pool and can withdraw any time.
The returns are a % of the trades from the pool, but the platform itself (Sushiswap, Quickswap etc) allocates a share of their token as a reward. The token itself gives an effective right over the platform's profits and can be staked for dividends.
There is no counterparty. The platform has a smart contract which means only I have access to my share of the pools.
They don't have to do anything in terms of rates, but they compete with other projects. The percent cut I get is close to what the other platforms like Uniswap offer.
What is BC? BTC is its ticker and abbreviated name just fyi.
Well I am not using tether, I put "real fiat" NZD in and get Bitcoin. Along with the vast majority of anyone who is constantly stacking sats.
Yes tether is a scam and will implode at some point. This will be really bad for the market, a Mt Gox scale event that might put it to sleep for a few years. But I have confidence that it will return, and so I will be stacking as many cheap Satoshis as I possibly can.
Bitcoin is Bitcoin, the network doesn't care about the dollar denominated value, it will just keep on getting harder to find.
IPCC report is pretty damming. Let's see how much further governments including ours (actually ours is one of the worst) can jam their heads in the sand.
Even ignoring the escalating drawdown issue, it seems we are hell bent on screwing up the thing that supports our entire existence. The thin blue line has its own pandemic going on... it's us.
We must immediately shut down Huntly. Burning all that nasty coal. That way we'll get to show the country what power shortages and rolling blackouts are really like. But wait, lots and lots of wind farms will be reliably blowing when we need them and the sun will be shining at 6pm in winter to provide solar. I hear you say we'll put ginormous batteries to make up for that. The cost never mind about that.
Darn this global warming. Sorry read climate change.
Now, 9Aug21 as espoused by the Secretary General of the UN we have code red on climate change.
Go back a while
U.N. Predicts Disaster if Global Warming Not Checked
PETER JAMES SPIELMANN June 30, 1989
UNITED NATIONS (AP) _ A senior U.N. environmental official says entire nations could be wiped off the face of the Earth by rising sea levels if the global warming trend is not reversed by the year 2000.
Coastal flooding and crop failures would create an exodus of ″eco- refugees,′ ′ threatening political chaos, said Noel Brown, director of the New York office of the U.N. Environment Program, or UNEP.
If only we had continued to explore for and expand our natural gas extraction...Oh hold on.
https://world-nuclear.org/information-library/facts-and-figures/heat-va…
Or we could expand Huntly and burn crap loads of coal with no incentive to invest in renewables. Then one day we run out of coal and have to face the issue regardless (maybe not 'we' but the next generation, so that is fine?). Or maybe they won't because the planet will be 10 degrees warmer and the odd blackout is the least of their worries.
Nigelh - yours was a classic linear self-justification. Good as it gets, example-wise.
His prediction is/was spot-on - learn about systems and feed-back-loops:
https://www.interest.co.nz/opinion/98119/murray-grimwood-looks-how-we-s…
https://www.youtube.com/watch?v=HMmChiLZZHg
Even by 2000, we were on the runaway train. And even by 2000 we were late. What comments like yours tell me, 2 decades later - is that we're stuffed. We haven't the cranial capacity to stop; not enough of us, anyway. Heck, here are still folk daily lauding what someone up-thread perfectly described as: "we need to ensure that ship loads of Warehouse plastic tat are going to be unloaded".
Some of us are designing PlanB; it'll be needed.
Yes, he's a long way back, that one. I'd like to do a survey of those who are religious, correlated with those who believe we aren't dong any planetary damage/aren't in overshoot/ should just keep on concentrating on GDP.
It may well be that belief is a common cranial wiring........
Then God said, “Let us make man in our image, after our likeness. And let them have dominion over the fish of the sea and over the birds of the heavens and over the livestock and over all the earth and over every creeping thing that creeps on the earth.”
I can see how religion and overshoot denial might be correlated.
"And let them have dominion over the fish of the sea and over the birds of the heavens and over the livestock and over all the earth and over every creeping thing that creeps on the earth" does mean licence to destroy the environment, nor absolve them of responsibility for f**king it up! And if they use that God given brain of theirs and look at human history, they will understand that God will NOT pull their fat out of the fire when it all turns to custard!
well Transpower have been caught with their pants down. So the government wants to ban all gas, everyone switches to electric hot water and electric cooking, lets ban all wood fires and everyone goes on heat pumps. Lets ban all petrol and diesel cars and go electric. But we better hope we don't get a cold spell or a hot spell as the electricity network can't cope. Again poorly thought out agenda from the government, no idea what or if the real world can cope with the fairy tail world they live in.
Not at all. They just don't want dams in the Mokihinui, which if you have been down there, you would know why. It's a freaking massive biodiversity zone.
There's plenty of other places we can dam, without destroying our natural environment. Here's a list of rivers off the top of my head:
Acheron
Clarence
Otaki
Waiohine
Wairau/Rainbow
Most of them are not in areas with incredible biodiversity. Jeez, damming the Clarence where it comes out of the gorgey bit West of "The Store" with a 70-100m dam face and it would be another Clyde dam.
So in your opinion, what was the problem with the Ruataniwha dam in Hawkes Bay?
No doubt there are many great places we could build, but the objections for anywhere are always the same, and they endlessly push the same narrative so nothing, I repeat NOTHING gets built.
Ruataniwha was not for hydro power, it was an irrigation scheme, so not pertinent to this discussion. Greens firmly opposed it as it would mean huge downstream intensification of agriculture in areas where the ground water contamination would have been huge.
The Tasman dam, they also opposed for the same reason, but it's gone ahead anyway (showing that just because the Greens don't support it, doesn't mean it won't happen). They are a minority party, if the two major parties wanted to do it, or a local council, they could (and should). Green opposition doesn't actually mean much until they strike a chord with the public around protecting real biodiverse areas (for reference, see the opposition to mining in National Parks, led by the greens).
No new generation gets built because: 1. The electricity market is broken thanks to the gentailer model causing them to not want to build new supply. 2. Governments are hesitant to start anything big, because by the time it's built (which is usually 10 years), they won't get kudos for it. If it fails, they get burned. Successive governments are useless at delivery, cowardly, power hungry, conservative numpties. 3. The public of this country has little clue about these two things.
Yet another foreign 'investor' in strife. Good to see OIO doing its job.
https://www.nzherald.co.nz/nz/foreign-billionaire-forced-to-sell-west-a…
Hasn't come out yet, but the background cause of this is the nature of our non-competitive electricity market. The generators have been playing a game of keeping generation low so as to ensure that electricity prices remain high - some analyst or algorithm failed to predict the spike in demand fast enough and they got caught out.
That's why Transpower have been diplomatically stating 'insufficient power generation was made available' - plenty of transmission capability - it's not that it couldn't have been made available - it's that there was a screwup with the market makers on the generation side leading to a massive spike in the wholesale pricing.
Hopefully this will be the spark that ignites the fires of anger leading to a proper shakeup in the card/shell game that is the NZ electricity market - it's dysfunctional and needs to be (more) heavily regulated to prevent the marketeers games resulting in events like last night - that truly endangered the lives of real people.
To be fair, anyone with generation assets which weren't online last night would have been kicking themselves for the screw-up too -- if not from a public interest perspective, just from having missed out on stepping in to fill those massive spot prices.
But yes I think there's increasing recognition that the market is, shall we say, flawed.
And they're just now tugging on the string :- "Minister Woods told media she had written to generator companies seeking assurance that every available generation unit would be switched on. It appeared that had not been not the case in the outages 12 hours earlier."
Probably would be good; shareholder obligation needs to be taken out of an existential issue. But the central planner-types don't seen to have much more nous.
But the bigger problem is us. We presume unlimited supply - because we deserve it? We could just fit in with parameters. But then, you get a medico suggesting that inversion-airsheds should outlaw logburners. Has anyone told him about this? Has he bothered to think through the displacement energy-demand thing? Bet your bottom dollar he didn't. \
We need correlated leadership. Meshed systems. Logic.
Not at all with power companies, because the gubbmint still owns 51%. So they could forcibly split the retailers from the gentailers, take the assets back, give them to transpower to manage and leave the retail arms to become more efficient with a wholesale market price set by transpower. Transpower should be run like an SOE returning dividends to the government which should be ringfenced into electricity supply. If they are returning too much to the government for these purposes, the wholesale price of power should be dropped, leading to customer savings.
It's completely f$%ked at the moment, no incentive for gentailers to create more supply because if they do, power prices go lower. So they intentionally dump water out of the southern lakes to keep prices higher and intentionally don't invest in new risky projects as it would shoot themselves in the foot. It's reminiscent of the Californian electricity crisis of the 2000's, which shows what happens when supply is decided by the profiteers.
You don't run a modern society on hydrogen.
https://www.mbie.govt.nz/dmsdocument/10624-susan-krumdieck-a-vision-for…
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