Bernard Hickey details the key news over the weekend in (slightly more than) 90 seconds at 9 am in association with Bank of New Zealand, including news of New Zealand's biggest natural and financial disaster since the Hawkes Bay Earthquake of 1931.
The 7.1 magnitude earthquake on Saturday shattered houses, roads, water pipes, sewage systems and the Port of Lyttelton.
Treasury have estimated the cost of repairing the damage at over NZ$2 billion. The Insurance Council is expecting claims in the hundreds of millions of dollars. See more detail here.
Some have estimated up to 20% of housing is uninhabitable and will have to be rebuilt, along with roads, bridges, pipes and the ports.
The Earthquake Commission will pay the first NZ$100,000 to repair damaged houses and the first NZ$20,000 for damaged contents.
However, many small and medium businesses have suffered major disruption and not all will be covered by their insurance.
There will be an influx of spending and funds into Canterbury, which may boost economic activity in the short term.
But this doesn't disguise the loss of wealth accumulated in housing and infrastructure that will need to be replaced from national and local savings.
In many cases we will see a shuffling of savings into spending across time and between parts of New Zealand. See more here on the Paradox of the Broken Window.
The New Zealand dollar fell only slightly this morning to 71.8 USc despite the scale of the disaster.
The Earthquake Commission will have to liquidate some of its NZ$6 billion in savings, two thirds of which are in New Zealand government bonds. These sales of government bonds may pressure interest rates higher, although a Reserve Bank hike in the Official Cash Rate next Thursday is now seen as extremely unlikely.
Some have also suggested the surge of spending into Canterbury and the shortage of resources locally may push up inflation in the region.
Your views and experiences. We welcome your comments below.
No chart with that title exists.
30 Comments
Great name Donald
Here's that article
http://www.stuff.co.nz/sunday-star-times/business/4093494/Matters-of-li…
Wolly is a rock star
cheers
Bernard
Good question and great title for a recipe, thanks. I haven't spoken to them other than by txt but we'd rung on Wednesday for our daughter's birthday and they said they'd buy flights to come see us in December... I'm not sure that's still on now.
They never understood why we'd leave France, family and friends to settle in NZ to be honest (and I gave up trying to explain a long time ago). But we told so much good about NZ to my cousin and his wife for the first couple of years that they moved here too 6 years ago(Wellington). So now we get blamed for enticing other family members this far away too. Can't win :)
Quite true. He's got a degree from the most highly regarded French engineering school and is a uni lecturer and researcher in quantum physics so I'm guessing he may have done some probability calculations and decided the risk was low enough before settling. Or maybe the location and weather conditions were just too much of a draw for a winsurfer like him!
FYI, the poor old Aussies - http://www.businessday.com.au/business/nz-quake-set-to-shake-australia-…
Some more interesting information:
Reading, then acting in the current time of the 21st century, I think we shouldn’t always wearing bigger glasses, but occasionally one single magnifying glass.
Just other infos:
History suggests Saturday's destructive 7.1 Canterbury earthquake could be a trigger for a series of major earthquakes which New Zealand must prepare for, scientists say.
Victoria University's geophysics professor Euan Smith said Saturday morning's magnitude 7.1 quake did some things "as expected" but "had some surprises as well."
http://www.stuff.co.nz/national/4098378/7-1-earthquake-more-to-come-scientists-warn
The real problem will come from rash decision making by eager beaver people who do not take the time to consider unintended consequences. A bloody mad rush to 'do it all and do it now'..this must be avoided. granted the rail line and roads, sewage and water are all critical needs. But care must be taken to ensure massive local inflation does not take off. Charge out rates and fees etc should not be different to the day before the quake. It will be for govt to keep a sharp eye on who is trying to cream what from this mess.
I agree - this will be a huge issue for the small and larger business community. Many have been trading in a loss or at break even through the financial crisis. It would not be fair to look at only the more recent trading history.
I will speak to a few insurers and see how they plan to deal with this and also talk to Chris Ryan and the Insurance Council.
Something needs to be done or it could kill many small businesses that are crucial to the economy of Canterbury and NZ.
I see it hasn't been only silt sand and mud oozing from the ground in Chch..some of the scum has come to the surface as well...... http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10671483
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