Black Monday

[BlackPeter]

Anybody watching the BEAR and the Strong Bear (BBOZ) on the ASX? They've been flat-lining for a couple of days but now it feels they are bouncing off the MA200. Next downturn of the markets - and bear-spring is in the air?

Obviously - it will take some days before we know whether the bears continue their march, or whether this is just a dead-bear bouncing.

[bull....]

markets still thinking about which way to go below resistances

[blobbles]

Brexit vote is in. Looks like a hard Brexit is on the cards. I would expect turmoil in the markets...

[winner69]

Brexit vote is in. Looks like a hard Brexit is on the cards. I would expect turmoil in the markets...


Maybe for a few hours

All back to normal tomorrow

[Joshuatree]

Its built in somewhat isn't it. S &P 500 up .82% atpit. Vote of no confidence tomorrow by the looks.

[BlackPeter]

Maybe for a few hours

All back to normal tomorrow

I guess the outcome should not come as a surprise anyway. Only problem might be - there is no plan B ... and markets hate uncertainty.

Interesting times

[mfd]

Brexit vote is in. Looks like a hard Brexit is on the cards. I would expect turmoil in the markets...

Pound has strengthened which suggests to me a new referendum or softer Brexit deal is considered more likely. Lots of ways this could go now though...

[bull....]

broke above 200 but still plenty of resistance in and around 2600 - 2640

[Peitro]

It appears that this thread almost made it onto the second page. Better put a stop to that.

It would be interesting to graph the posts per day on this thread over the last few years. It would be a good fear index and in hindsight an indicator of when to buy 😂

[Joshuatree]

2nd page of what?

[see weed]

Dow Jones up 499 points today and 824 for the week and 2,578 since 24/12/18. They must be starting to drink a2 milk over there and feeling good about themselves, wondering maybe we should start buying into this company before it gets to $20 or a takeover offer. Now don't get excited Left Field :t_up::D:t_up:.

[Ggcc]

Dow Jones up 499 points today and 824 for the week and 2,578 since 24/12/18. They must be starting to drink a2 milk over there and feeling good about themselves, wondering maybe we should start buying into this company before it gets to $20 or a takeover offer. Now don't get excited Left Field :t_up::D:t_up:.

If a takeover were to happen they would need to offer well over $20 per share. At what realistic price would people be happy if that were to happen? I am saying $22

[Grimy]

2nd page of what?
2nd page of threads.
I don't think there will be much chance of it disappearing off the 1st anytime soon.

[winner69]

Bit of TA suggests world going to be OK for a while

[Baa_Baa]

Bit of TA suggests world going to be OK for a while

Yes, a very healthy chart, nice uptrend, currently double topping. Lots of trading opportunity along the way. What is the chart of though?

[peat]

Bit of TA suggests world going to be OK for a while

my TA suggests otherwise. perfect bearish gartley formed on the NZX50 , see the thread.
it worked on ZEL remember

[bull....]

having a expected down day in us markets , even after the big rally overall picture hasnt changed

[BlackPeter]

Hmm - Energy Minerals and Consumer durables (both currently down by more than 10%) looking a bit sick this morning and Nasdaq (-2.3%) not looking flash either. These holidays don't seem to be good for our American friends, and maybe Trumpy should reopen the government for a sec and stop his war games?

Wondering how our markets will react?

[Balance]

having a expected down day in us markets , even after the big rally overall picture hasnt changed

Out comes the worry beads for some punters?

DJI was up 8.9% since Jan 4th.

Nasdaq was up 11%.

[bull....]

Out comes the worry beads for some punters?

DJI was up 8.9% since Jan 4th.

Nasdaq was up 11%.

this is what happens when markets fall to quick and fast you get a bounce back. as i say end of last yr yrly bar was bearish , the fact the market started the year up makes it more bearish in my view.

[Balance]

this is what happens when markets fall to quick and fast you get a bounce back. as i say end of last yr yrly bar was bearish , the fact the market started the year up makes it more bearish in my view.

Don't disagree with you.

I am simply observing how often the worry beads come out.

Anyone investing in the markets long enough knows that a stock falls heck of a lot faster than it rises. Fear is a stronger emotion than greed.

[Lewylewylewy]

I agree, but these past few years has desensitized investors and traders somewhat. We're now used to 3rd world style leadership gaffs and shrug off threats that would have caused panic 5 years ago.

[Joshuatree]

2nd page of threads.
I don't think there will be much chance of it disappearing off the 1st anytime soon.

We are on the 132nd page.

[peat]

We are on the 132nd page.
I thought that but then considered he means on the first page of 'New Posts'

[Grimy]

I thought that but then considered he means on the first page of 'New Posts'
I'm sure that's what Peitro meant...….

[Peitro]

Sorry for being more cryptic than I intended.

Yes, page 1 of recent latest posts, ie being actively talked about.

[Joshuatree]

Too vague for me.

This is going to go down like a can of worms on the markets
US charges Huawei with fraud, China tensions escalate (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12197905)

[moka]

David McKay the president and chief executive of Canada’s biggest bank jotted down some thoughts about his fourth visit to Davos.
5G The next generation mobile technology promises to usher in an era of ever-present, lightning-fast data that flows like electricity, powering self-driving cars, delivery drones, and digitally-enabled appliances. However, McKay found the Davos set wasn’t fully up to speed.
“I found it intriguing that despite the buzz, many of the world’s business and government leaders seemed to know little about 5G,” he wrote.
McKay said there’s little doubt that Huawei Technologies is a leader in the space, and questioned if nations who shut out the Chinese telecom giant over fears of state ties will be left behind.
https://ca.finance.yahoo.com/news/dissecting-davos-royal-banks-ceo-defined-summit-171942706.html

[bull....]

us markets in a range dji 24300 - 24800 watching and waiting for directional break

[Joshuatree]

So far the USA company earnings reporting season has been good. Apple due to release after mkt closes.

[bull....]

dow breaking out range , not sp500 yet though 2670 - 75 got the fed meeting shortly see what happens

[Joshuatree]

Interest rates on hold USA mkts up 1.8-2% plus , Gold also up $US 1319 oz

[winner69]

Looks like they got their way ...Jerome falling into line

[Joshuatree]

No , more a case of economic uncertainty, Hard brexit, The shutdown , Venezuela powder keg, Trade wars China etc.

[Lewylewylewy]

With things slowing down, it's looking like the minimum wage increase will come at a really interesting time. I forecast that the mwi will either kick things back into action or be the straw that breaks the economy.

[peat]

For me - some selling, not buying....
building cash at opportune exit points.

next few months quite critical from a technical perspective. I suspect weakness maybe even a strong fall esp in NZ market.
I dont wish it, but I am prepared for it (not shorting anything tho).

[winner69]

Monthly Economic Indicators from Treasury sort of say NZ economy doing pretty well at the moment

https://treasury.govt.nz/publications/mei/monthly-economic-indicators-january-2019-html

[peat]

for me its technical fear, not fundamental fear

sorry for crude drawing.

10296

[Joshuatree]

USA reporting season at the halfway mark.

71 % of companies beat earnings estimate
61% beat revenue estimates
6 out of 11 S&P sectors double digit profit growth

Not as good as same time last year though.

Im still building cash where possible but tempted by a few financial beat downs in aus now that the haynes report is out and things are not so bad.

[bull....]

breakout pattern still working

[blackcap]

breakout pattern still working

Post bell, GooG beats expectations yet stock drops 3%. (from close) Not sure what is going on there.

[bull....]

Post bell, GooG beats expectations yet stock drops 3%. (from close) Not sure what is going on there.

maybe cause they got so much cash on hand

[Joshuatree]

Capital expenses growing
Competition growing from amazon etc
Gross margins less
R & D higher

[winner69]

A good Hedgeye cartoon explaining cycles

[NeverQuestion]

What a crazy few months!! December stock markerts threatens crash.. Fed panics.. QT stops and they go into wait and see mode.. Mark my words, QE will start again.. Next stop? Rate cuts and Hyperinflation???

Seems like the Fed are always 3 months behind what is really going on. I see a whole lot of US companies laying off staff citing various reasons last month. Very similar to what happened in 2008. All related to profit hits. I also see reports of retail stores closing and the Automotive markets taking a hit. Oil down. Mutiple market indicators saying recession around the corner.

On top of that we have Germany and Italy announce they are in a technical recession. China have already restart QE. The world is a mess right now. I think the real fireworks will be in October/September this year.

As soon as QE starts up again you will see the bull run continue. But it won't stop the coming crash.. personal debt is too high

Starting to get scary I think

[NeverQuestion]

What a crazy few months!! December stock markerts threatens crash.. Fed panics.. QT stops and they go into wait and see mode.. Mark my words, QE will start again.. Next stop? Rate cuts and Hyperinflation???

Seems like the Fed are always 3 months behind what is really going on. I see a whole lot of US companies laying off staff citing various reasons last month. Very similar to what happened in 2008. All related to profit hits. I also see reports of retail stores closing and the Automotive markets taking a hit. Oil down. Mutiple market indicators saying recession around the corner.

On top of that we have Germany and Italy announce they are in a technical recession. China have already restart QE. The world is a mess right now. I think the real fireworks will be in October/September this year.

As soon as QE starts up again you will see the bull run continue. But it won't stop the coming crash.. personal debt is too high

Starting to get scary I think

This guy is really good if you want to keep track of developments day by day. bases a lot of his arguments on statistics :

https://www.youtube.com/watch?v=hA0g-bi9-1Q

[moka]

https://www.youtube.com/watch?v=H8qyEx_uA4Y
Financial Collapse - US, Europe And China Are All Collapsing But Will Do So Differently - Part 1 by Strategian.
This is the first of a series of 5 videos which will show that each economic zone of the U.S., China and Europe are in the beginning phase of collapse. As I point out in the videos, all three are collapsing BUT differently. It's just a question of which one collapses first and what the trigger(s) that initiate the crash will be. That's why I cover multiple triggers, however my biggest concern is and has been the debt levels that are in my view unsustainable.
Global debt $250tn, Global GDP $75tn so a multiple of 3.3.
The corporate bond market has exploded $9.6tn and 40% are junk bond status.

Financial Collapse - Brexit And Ireland's Impending Mega Crisis!
Ireland - 50% of tax receipts is servicing debt which is unstainable.
https://www.youtube.com/watch?v=fgJCorhsr64

https://www.youtube.com/channel/UClZY-A9DGiR10ZlUMTLjDBQ/videos

[Joshuatree]

eurozone just downgraded from 1.9 to 1.3% growth with negative int rates.

[bull....]

eurozone just downgraded from 1.9 to 1.3% growth with negative int rates.

and trump , xi meeting postponed?


https://www.cnbc.com/2019/02/07/stock-market-us-stocks-focus-on-earnings-and-trade-war.html

anyway that pattern worked pretty good we had a 500 pt move which indicated 25200 went to 25400 so pretty close

[BlackPeter]

Haven't fact checked this opinion piece, but bleak reading.
https://www.smh.com.au/business/the-economy/the-eurozone-hell-that-haunts-brussels-20190211-p50wxg.html

You just wonder why the hard line Brexiteers find nothing more relevant than pointing to the weaknesses of the Eurozone. Sure, there are some inherent problems, but Britain never was part of it, no issue for them. However - the post Brexit recession started for Britain already early - this is something which should worry all of us:

https://www.theguardian.com/business/2019/feb/11/manufacturing-slump-puts-uk-economy-into-reverse-as-brexit-looms

[bull....]

howd support at 25k looking at test recent highs again

[arc]

Still a lot of nervousness in the market. Despite some places saying "buy now" (meaning 'we need someone to sell to'), many larger investment houses are tending to a more cautious approach.

https://www.ccn.com/while-dow-surges-key-metric-investors-us-stock-market-bluff

[winner69]

Suppose this means the next few weeks not going to be that good

@charliebilello
On Dec 24, only 1% of stocks in the S&P 500 closed above their 50-day moving avg, one of the most extreme oversold levels in history.

After an 18% vertical rally over the last 8 weeks, that number now stands at 92%, one of the most extreme overbought levels in history.

[blackcap]

Speaking of Black Monday. On Soho there is a new series titled Black Monday. I have seen the first 2 episodes. Very funny!


https://www.sky.co.nz/-/ep_soho_black-monday_jan19

Out with the blue blood, in with the new blood.

This manic comedy takes us back to October 19, 1987 – aka Black Monday, the worst stock market crash in the history of Wall Street. To this day, no one knows who caused it … until now. It’s the story of how a group of outsiders took on the blue-blood, old-boys club of Wall Street and ended up crashing the world’s largest financial system, a Lamborghini limousine, Don Henley’s birthday party and the glass ceiling.

Starring Don Cheadle (Avengers: Infinity War), Andrew Rannells (Girls), Regina Hall (Insecure), Paul Scheer (Veep), Carey Wilson (Gone Girl), Eugene Cordero (The Good Place), Michael James Scott and Kadeem Hardison (Cult).

[value_investor]

Looks like the Fed have backed down on the rate hikes for now and the markets have taken it for what its worth and rallied off the back off it..

I won't be that surprised if the market is brought back down to earth after all this off something else happening. The volatility is just rising, and in between all that will be buying opportunities.

[bull....]

Looks like the Fed have backed down on the rate hikes for now and the markets have taken it for what its worth and rallied off the back off it..

I won't be that surprised if the market is brought back down to earth after all this off something else happening. The volatility is just rising, and in between all that will be buying opportunities.

totally agree , be nimble theres opportunity for trading and theres income from utilities

So, in summary, investors controlling somewhere in the region of $US100 trillion in assets are at best cautious, at worst outright bearish, on the state of global growth and they are more concerned about the return of their capital than the return on it

https://thewest.com.au/business/economics/boring-bonds-crucial-to-global-growth-ng-b881106790z

[bull....]

https://www.asiatimes.com/2019/02/article/bet-on-trump-to-fold-in-china-trade-talks/

suggests trump will fold in negotiations instead of looking at the big picture

[arc]

on the state of global growth and they are more concerned about the return of their capital than the return on it



Bull. Nicely stated.

[BlackPeter]

https://www.asiatimes.com/2019/02/article/bet-on-trump-to-fold-in-china-trade-talks/

suggests trump will fold in negotiations instead of looking at the big picture

I would not bet against them - they clearly have the odds in their favour :):

[JBmurc]

Speaking of Black Monday. On Soho there is a new series titled Black Monday. I have seen the first 2 episodes. Very funny!


https://www.sky.co.nz/-/ep_soho_black-monday_jan19

Out with the blue blood, in with the new blood.

This manic comedy takes us back to October 19, 1987 – aka Black Monday, the worst stock market crash in the history of Wall Street. To this day, no one knows who caused it … until now. It’s the story of how a group of outsiders took on the blue-blood, old-boys club of Wall Street and ended up crashing the world’s largest financial system, a Lamborghini limousine, Don Henley’s birthday party and the glass ceiling.

Starring Don Cheadle (Avengers: Infinity War), Andrew Rannells (Girls), Regina Hall (Insecure), Paul Scheer (Veep), Carey Wilson (Gone Girl), Eugene Cordero (The Good Place), Michael James Scott and Kadeem Hardison (Cult).

Yes been watching it also a good laugh

[bull....]

consolidating under big 2800 level

[winner69]

Bull...

What happened to the important 2620 level of the S&P500

Seems to be above that now

[BlackPeter]

Bull...

What happened to the important 2620 level of the S&P500

Seems to be above that now

Don't wake up our bear in disguise - he must be hibernating ;);

[bull....]

Bull...

What happened to the important 2620 level of the S&P500

Seems to be above that now

been busy reporting season lots of reading to do , you must have missed my post a little back i said market needed to get above and stay above next resistance of 2800 sp500.

if you look thru my posts i also said the us markets were in a big range that would be decided this yr ( correct at this stage ) as the dec rout attemted to break it down thru the range and failed now we are heading back to the top of the range. my bearish stance end of last yr was warranted as we were heading down to the bottom of the range which equated to a 20% drop no small change.

[bull....]

still consolidating , looks healthy too me for eventual breakout

[Joshuatree]

https://mobile.abc.net.au/news/2019...th-jobs-on-the-line/10860682?section=business (https://mobile.abc.net.au/news/2019-03-01/reporting-season-points-to-slowing-economy-with-jobs-on-the-line/10860682?section=business)

Good article with stats re Australia after reporting season.More than 40% of companies reported falling profits.

[value_investor]

9 of the 10 last weeks have been higher on the US markets, likely to have priced all of the bounce back of a potential trade deal going through as well as the change of tone in the Fed. Shiller PE back to a 30 (highest of 34 during last year).

I'd be a bit careful because a change in sentiment on both will likely bring in back down to December levels again further on.. From a domestic market pov, that's when buys might present itself because I really think the markets here are very overbought and earnings were quite flat.

[winner69]

Hey bull .... S&P500 at 3000 soon I reckon

[bull....]

Hey bull .... S&P500 at 3000 soon I reckon

since ww2 according to this report stocks have rallied 100% of the time after mid term elections on average 17% so this rally so far is not un normal in fact it is quite normal and on average quite a mild rally at this point of time.

https://www.forbes.com/sites/stephenmcbride1/2018/11/02/ive-studied-stocks-after-every-midterm-election-since-world-war-ii-what-i-found-will-shock-you/#3163f19c3c20

[bull....]

people need to remember also there are a lot of fund managers who have missed the rally since jan and are now forced to re in vest there cash on the sidelines or run the risk of having people with drawl there funds due to non performance. so this is another catalyst to propel markets higher in march


just some headlines crossing now about trade deal. should mean us futures will open strong at lunchtime

[couta1]

Sell in May and go away could also be coming.Lol

[allfromacell]

Meanwhile the NZX50 just touched a new all time high.

[bull....]

Meanwhile the NZX50 just touched a new all time high.

yes a very bullish sign to see the nzx hit new all time highs

[sb9]

yes a very bullish sign to see the nzx hit new all time highs

Thanks largely due to ATM.

[bull....]

Thanks largely due to ATM.

actually stocks like mel ,cnu , ift , cen , gne , mcy guess utility type companies are leading the charge last 6mths probably be even more attractive ahead now since central banks are keeping rates on hold or even we say places like nz / aus might reduce rates

[sb9]

actually stocks like mel ,cnu , ift , cen , gne , mcy guess utility type companies are leading the charge last 6mths probably be even more attractive ahead now since central banks are keeping rates on hold or even we say places like nz / aus might reduce rates

Yes. agree.

[Joshuatree]

Bull mkt 10 years old this week!!

[Bobdn]

Yep, started investing again this week in March 2009 after watching Jim Crammer say things can't get any lower. I didn't know what I was doing really but it didn't really matter - no skill has been required over the last 10 years to make money you just had to be in the market. Virtually didn't matter what you bought. Anyway, this bull market enabled me to retire in late 2017 so I can't thank it enough.

Just today, however, I added to my gold and silver position. I'm more about wealth preservation these days.

[JBmurc]

Hard to believe its been 10yrs since the start of the BULL run ... thinking it will make it one of the longer BULL runs in history ..Whole ton of DEBT has fuel it ..corporate buybacks in the billions driving EPS growth

Cheap money soooooo good for asset markets >>

the hunt for yield will dominate the next decade(or even just capital preservation Gold/Silver) .... with consumers tapped out ... wages flat etc

No point paying of smart debt too the limit I say (business investment debt = Good debt personal = bad debt)

Just got to be very smart where you have the loaned funds invested

[Onion]

Is it starting again? Aussie property is choking big time.

https://www.couriermail.com.au/business/breaking-news/mortgage-defaults-hit-suncorp-bondholders/news-story/2ddf53669065f53e167dbfa35272a96d?nk=a050d285ebd403 472394b8b76691c2f4-1551920767

I think you overstate the significance.

My reading of the article concludes:


The bond repayment restrictions are NOT typical of the overall Australian mortgage market (the normal Suncorp mortgage book is not affected to the same extent)
Other such "difficulties" have occurred since the GCF so this is not necessarily a reflection of anything new

[bull....]

bond yields fall world wide following dragi comments

https://www.cnbc.com/2019/03/07/ecbs-draghi-slashes-growth-forecasts.html

even in nz bonds falling , swap rates near all time lows = lower mortgage rates unless banks decide to rort it ( probably already are lol ) lower term deposits coming.

the dow jones utilities is very close to hitting an all time high same most countries. it shows low growth environment investors are chasing income as interest rates may go even lower still world wide

[bull....]

GDP slowdown will trigger job losses and RBA rate cuts that won't be passed on, analysts warnhttps://www.abc.net.au/news/2019-03-07/gdp-slowdown-a-cause-for-concern-westpac-bill-evans/10878764?section=business


if aus goes that way nz will follow just like night follows the day

[JBmurc]

GDP slowdown will trigger job losses and RBA rate cuts that won't be passed on, analysts warnhttps://www.abc.net.au/news/2019-03-07/gdp-slowdown-a-cause-for-concern-westpac-bill-evans/10878764?section=business


if aus goes that way nz will follow just like night follows the day

Have to or else NZD/AUD will got to parity or even higher if RBA drops to 1% and we stay @ 1.75%

Will hurt NZ as AUS are biggest services trading partner would think inflation in costs for kiwis

And many exporters 14.5billion in trade to AUD will be a right kick in the guts ..

[NeverQuestion]

The alarm bells just keep coming!

Best bull market since 1987! Low unemployment they say!

Yet December we saw China pump the markets with Trillions of dollars, ECB just announced last week that they are back to QE.. they are still at 0% interest rates?! The Fed have announced no more QT and we are back to wait and see mode instead of hikes this year!

Huge number of store closures announced in the US for a lot of the major retailers.

Auto loans are in arrears for close to 8 million in the US.

Suncorp (AUS bank) just announced they some investors may not get their full funds back on a mortgage security.

China output down by 20%

Property markets in US,Canada,Australia starting a long decline. With in inventory raising in NZ.. last month 10000 properties for sale in Auckland.. same month last year 4000 for sale.. downturn coming here also.

Sounding like a meltdown is close.. September or October are the months to be in cash positions.

If you don't believe me feel free to google search all this!

https://www.bloomberg.com/news/articles/2019-03-11/global-economy-hits-its-weakest-spell-since-financial-crisis

[bull....]

no vote for brexit

in the article blog they give graph of what happens now

https://www.bloomberg.com/news/articles/2019-03-12/may-gets-late-night-deal-focus-turns-to-key-vote-brexit-update

[bull....]

back above 2800 - 2812 resistance lets see how we close , a close above needs another day or two then maybe new highs are coming. see dju at all time highs

[bull....]

Financial markets have fully priced in the likelihood the RBA will cut its cash rate by September and a 50 percent chance of another cut by the end of the year.
The market has priced in a 70 percent chance of an official cash rate cut in New Zealand within the next 12 months.

http://www.scoop.co.nz/stories/BU1903/S00348/it-all-comes-down-to-the-inflation-target-bnzs-toplis.htm

totally aus will lower there rates . im picking rbnz will lower theres in tandem with the higher bank capital requirements. anyway all good for holding utilities

[sb9]

Financial markets have fully priced in the likelihood the RBA will cut its cash rate by September and a 50 percent chance of another cut by the end of the year.
The market has priced in a 70 percent chance of an official cash rate cut in New Zealand within the next 12 months.

http://www.scoop.co.nz/stories/BU1903/S00348/it-all-comes-down-to-the-inflation-target-bnzs-toplis.htm

totally aus will lower there rates . im picking rbnz will lower theres in tandem with the higher bank capital requirements. anyway all good for holding utilities

You may want to read the below as to why RBNZ may not follow RBA rate cut...

https://www.interest.co.nz/opinion/98607/chance-rba-rate-cuts-rise-it-wrong-think-rbnz-will-follow-momentum-here-very-different

[bull....]

You may want to read the below as to why RBNZ may not follow RBA rate cut...

https://www.interest.co.nz/opinion/98607/chance-rba-rate-cuts-rise-it-wrong-think-rbnz-will-follow-momentum-here-very-different

that economist forgets to mention the nzd/aud forex rate would probably go over 1 to 1 if interest rates in nz become more attractive than aus. this would cause further contraction in nz gdp as exporters slowly become uncompetitive across the ditch and lay off staff in nz and cut costs etc to remain in the game. also he is placing all his eggs on the nz housing market/ construction staying strong. but as we already see developers are going bust all over the place so there wont be enough of them left soon to maintain the big construction end of the market there this part of construction will decline

[NeverQuestion]

that economist forgets to mention the nzd/aud forex rate would probably go over 1 to 1 if interest rates in nz become more attractive than aus. this would cause further contraction in nz gdp as exporters slowly become uncompetitive across the ditch and lay off staff in nz and cut costs etc to remain in the game. also he is placing all his eggs on the nz housing market/ construction staying strong. but as we already see developers are going bust all over the place so there wont be enough of them left soon to maintain the big construction end of the market there this part of construction will decline

Agreed!!

I think a lot of people forget that the Central Bank interest rate is not specifically for Housing. Tho Low interest rates continue, they are actually a byproduct of Central Banks around the world trying to protect businesses/Economy from a collapse. This was done by lowering their funding costs. Allowing more time to pay back debt.

One of the other functions of Interest rates is to control imports/export of a given country.. Higher the dollar is in a country, the more people tend to import. But usually drops the demands for their products.. The lower the rate is, the more countries export, but obviously people stop importing as much due to costs.

This control is done via the dollar/exchange rate. Which can be influenced via interest rates. But by increasing/decreasing interest rates you are able to keep the country competitive in the global market place.

Now lets take the extreme example of the AUD dropping to 1AUD to 2NZD.. (New Zealand exports a lot to Australia. They are one of our major trading partners)

Central bank will need to react.Their mandate is stability, and need to maintain the order of things so to speak.Hence will cut the interest rate to keep the country competitive.. that is why the whole world cut interest rates when the Fed did.. to maintain competitive advantages in the market place. Without such actions the local Economy would suffer.

[winner69]

Seems the next few years going to be bad if NZ follows Australia. The main headlines on SMH just now.

House prices tumble even faster than during the GFC
https://www.smh.com.au/business/the-economy/house-price-tumble-now-extending-across-the-country-20190319-p515eb.html

And this headline is bad but only about tech stocks

'Reality has to kick in': Ominous warning about high-flying Australian shares
https://www.smh.com.au/business/markets/reality-has-to-kick-in-ominous-warning-about-high-flying-australian-shares-20190319-p515bi.html

[Joshuatree]

NZ has a shortage of houses, Aus has an oversupply. We will be ok and the oversupply in aus will balance out given a bit of time according to John Ryders in his latest newsletter(thread for this).He is quite bullish for the year in fact. Worth a read lots of stats from around the world too.

[JBmurc]

NZ has a shortage of houses, Aus has an oversupply. We will be ok and the oversupply in aus will balance out given a bit of time according to John Ryders in his latest newsletter(thread for this).He is quite bullish for the year in fact. Worth a read lots of stats from around the world too.

No shortage around here many houses for sale ... it's the price that is the problem.... and why they are still on the market
And we have one of the tightest rental markets in the country

[BlackPeter]

Seems the next few years going to be bad if NZ follows Australia. The main headlines on SMH just now.

House prices tumble even faster than during the GFC
https://www.smh.com.au/business/the-economy/house-price-tumble-now-extending-across-the-country-20190319-p515eb.html

And this headline is bad but only about tech stocks

'Reality has to kick in': Ominous warning about high-flying Australian shares
https://www.smh.com.au/business/markets/reality-has-to-kick-in-ominous-warning-about-high-flying-australian-shares-20190319-p515bi.html

You should have a look into John Ryders latest newsletter (http://www.globalnews.co.nz/). He reccons the global economy will come later this year out of stall modus and expects the first green shoots soon. US housing market strong, Australian housing market might still drop (until demand catches up with lots of ex-speculative supply) but he certainly does not predict a crash for the NZ housing market. Interest rates down, continuous demand (more people) and low new house building rates make it unlikely for NZ house prices to follow Australia.

[peat]

You should have a look into John Ryders latest newsletter (http://www.globalnews.co.nz/). He reccons the global economy will come later this year out of stall modus and expects the first green shoots soon. US housing market strong, Australian housing market might still drop (until demand catches up with lots of ex-speculative supply) but he certainly does not predict a crash for the NZ housing market. Interest rates down, continuous demand (more people) and low new house building rates make it unlikely for NZ house prices to follow Australia.

hey thanks for the summary BP
I always read his newsletter but have yet to do so at this stage - I am quite busy at the moment.

But my charting reviews have made me start to turn bullish again recently, and I was looking for a thread opposite to 'Black Monday' but couldn't find one.

[Balance]

hey thanks for the summary BP
I always read his newsletter but have yet to do so at this stage - I am quite busy at the moment.

But my charting reviews have made me start to turn bullish again recently, and I was looking for a thread opposite to 'Black Monday' but couldn't find one.

I use this thread to make some investment decisions. And so far, so good. :t_up:

Markets in the short term are driven by greed, fear and hope.

This thread 'Black Monday' aptly reaffirms what any psychologist knows - Fear is the most powerful emotion of the three in terms of impact on the market.

https://money.cnn.com/data/fear-and-greed/

As Warren Buffet stated : "Be fearful when others are greedy, and be greedy when others are fearful.":t_up:

[bull....]

Fed holds line on rates, says no more hikes ahead this year
https://www.cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html

confirmed back to low rates for much longer , bond yields tumbling, even in nz makes those utilities yields in nz look so good

[Balance]

Fed holds line on rates, says no more hikes ahead this year
https://www.cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html

confirmed back to low rates for much longer , bond yields tumbling, even in nz makes those utilities yields in nz look so good

Fed sees strong economy = rate hikes are good news, stocks soar.

Fed sees slowing growth = no rate hikes which is good news, stocks soar.

Whatever the Fed says or does, and however well or not well the economy is doing, it's great news.

[bull....]

Fed sees strong economy = rate hikes are good news, stocks soar.

Fed sees slowing growth = no rate hikes which is good news, stocks soar.

Whatever the Fed says or does, and however well or not well the economy is doing, it's great news.

actually the fed raising rates and saying they were going to keep raising them was a big cause of the big sell off end of last yr , since they have reversed there position the market has rallied.

[Balance]

actually the fed raising rates and saying they were going to keep raising them was a big cause of the big sell off end of last yr , since they have reversed there position the market has rallied.

A combination of concerns about slowing economic growth (now confirmed) and trade wars (now being negotiated) - when the Fed raised rates - caused the sell-off?

We now have the Fed backtracking in recognition of the slowing growth.

If the Fed raises rates now, markets will go into free fall for sure!

[winner69]

Fed holds line on rates, says no more hikes ahead this year
https://www.cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html

confirmed back to low rates for much longer , bond yields tumbling, even in nz makes those utilities yields in nz look so good

Putting the bit back in speculators mouths as they say

Good for markets short term ...not so good long term

The inevitable crash will just be bigger ..make the most of it as the sun shines

S&P500 at 3000 soon

[Balance]

Putting the bit back in speculators mouths as they say

Good for markets short term ...not so good long term

The inevitable crash will just be bigger ..make the most of it as the sun shines

S&P500 at 3000 soon

Not so worried myself, W69.

As long as inflation is under control, any market correction will be countered by a flood of liquidity by Central Banks and the Federal Reserve.

So watch inflation - that 's my strategy anyway.

10 more years of bull market ahead.

[bull....]

Putting the bit back in speculators mouths as they say

Good for markets short term ...not so good long term

The inevitable crash will just be bigger ..make the most of it as the sun shines

S&P500 at 3000 soon

the masters have found a way to prevent a crash EVER occurring again? QE

[winner69]

the masters have found a way to prevent a crash EVER occurring again? QE

Yes THEY continue to get their way

[Balance]

Yes THEY continue to get their way

It's your money and my money they are playing with - heads they win, tails you lose unless you know and play/join their game as well.

[BlackPeter]

Fed holds line on rates, says no more hikes ahead this year
https://www.cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html

confirmed back to low rates for much longer , bond yields tumbling, even in nz makes those utilities yields in nz look so good

Just holding bonds is fine. The bonds I bought late last year returned already now a higher return in (so far paper-) capital gains than they returned in interest - and the interest itself (between 4% and above 5%) is not to spit at either.

[BlackPeter]

the masters have found a way to prevent a crash EVER occurring again? QE

I suspect there is somewhere a maximum of free money you can pump into the markets without risking uncontrolled inflation ... but we shall see.

Opps - maybe we see this inflation already? Just look at property and stock prices ...

[peat]

the masters have found a way to prevent a crash EVER occurring again? QE

This time its different!!!

[bull....]

holding well above the 2800 level resistance , test of new highs soon?

[Balance]

I suspect there is somewhere a maximum of free money you can pump into the markets without risking uncontrolled inflation ... but we shall see.

Opps - maybe we see this inflation already? Just look at property and stock prices ...

Capital items - not factored into inflation.

[Balance]

holding well above the 2800 level resistance , test of new highs soon?

For sure - everyone now knows the Fed Reserve stands ready to pump in trillions of dollars if need be to keep the financial markets robust.

Seriously. :t_up:

[BlackPeter]

Capital items - not factored into inflation.

I know, but this is just an arbitrary defininton, isn't it? Stuff people need is getting dearer. This is inflation.

[bull....]

I know, but this is just an arbitrary defininton, isn't it? Stuff people need is getting dearer. This is inflation.

inflation figures are a load of crock , we all know the cost of living goes up way more than the inflation figures tell us.

[winner69]

Couple fascinating charts (Hussman) that shows easing didn't halt 00-02 or 07-09 slides in the SPX

[Balance]

inflation figures are a load of crock , we all know the cost of living goes up way more than the inflation figures tell us.

Economists will tell you that the CPI number is but a general guide.

Inflation on different things impact on different socio-economic and age groups rather differently - best eg. A young family setting up will feel the wealth destructive impact of house inflation while a retired couple with their own house will feel the wealth enhancing effect.

So policy makers can do no more than use the universally acceptable CPI (Consumer Price Index) number to formulate policies.

[Balance]

Getting the thread back on topic.
https://www.cnbc.com/2019/03/22/stock-market-wall-street-in-focus-as-growth-concerns-persist.html

As expected, out comes the worry beads.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12215532

"Flashing RED!"

Sell everything and go on holiday?

[bull....]

should be bullish for markets tonight in the us

Mueller Finds No Trump Collusion; Barr Sees No Obstruction Case
https://www.bloomberg.com/news/articles/2019-03-24/mueller-made-no-conclusion-on-obstruction-by-trump-barr-says?srnd=premium-asia

[arc]

As expected, cryptocoin trading mostly scams
https://www.ccn.com/most-of-bitcoins-trading-volume-is-fake-time-to-wake-the-f-up

[BlackPeter]

As expected, cryptocoin trading mostly scams
https://www.ccn.com/most-of-bitcoins-trading-volume-is-fake-time-to-wake-the-f-up

If you look at the cryptofanboys who used to (and maybe still do - haven't checked for a long time) populate our very own cryptothreads bullying everybody who was warning to "invest" into this scam, I have to admit - I am not surprised.

[bull....]

us markets in danger of having a false breakout above 2800 , closed right on support on friday. futures were up this morning on trump news but now negative , i guess on falling yields everywhere. australia bonds just hit record lows today

https://www.bloomberg.com/news/articles/2019-03-24/aussie-10-year-bond-yield-drops-below-1-8-to-new-record-low?srnd=premium-asia

[bull....]

sp500 still within range of holding support at 2800 , see what happens tonight

[stoploss]

that economist forgets to mention the nzd/aud forex rate would probably go over 1 to 1 if interest rates in nz become more attractive than aus. this would cause further contraction in nz gdp as exporters slowly become uncompetitive across the ditch and lay off staff in nz and cut costs etc to remain in the game. also he is placing all his eggs on the nz housing market/ construction staying strong. but as we already see developers are going bust all over the place so there wont be enough of them left soon to maintain the big construction end of the market there this part of construction will decline

here you go trying- to avoid parity and save the export sector ...
https://www.stuff.co.nz/business/111589755/kiwi-dollar-plunges-as-reserve-bank-hints-at-interest-rate-cut

[bull....]

here you go trying- to avoid parity and save the export sector ...
https://www.stuff.co.nz/business/111589755/kiwi-dollar-plunges-as-reserve-bank-hints-at-interest-rate-cut

orr did good job, dollar crashing. better to front run slowing growth than wait for the data to catch up

[bull....]

Draghi says the ECB stands ready to act and could delay a rate hike again
https://www.cnbc.com/2019/03/27/ecb-president-mario-draghi.html

sp500 still holding

[bull....]

good end to the week above 2800

https://www.cnbc.com/2019/03/29/white-house-advisor-kudlow-says-fed-should-cut-rates-report.html

calling for int rate cuts , world pivot for sure towards low rates for longer. good for equities as long as us growth is reasonable.

even us sectors last mth are seeing people chasing utilities , staples , real estate stocks with dependable divs.

https://www.bloomberg.com/news/articles/2019-03-29/china-u-s-said-to-pore-over-details-of-text-to-end-trade-war?srnd=premium-asia

china says good progress made by us and china in trade talks

[bull....]

nice start to the new mth in the us , test of highs soon? april traditionally is a very good mth for equities

[winner69]

nice start to the new mth in the us , test of highs soon? april traditionally is a very good mth for equities

Could be best year ever in the us if this rate keeps up.

[bull....]

Could be best year ever in the us if this rate keeps up.

yr after mid terms is historically 100% always been a ripper yr

Since 1946, there have been 18 midterm elections.
US Stocks Have Climbed Higher in the Next 12 months After Every Single One

https://www.forbes.com/sites/stephenmcbride1/2018/11/02/ive-studied-stocks-after-every-midterm-election-since-world-war-ii-what-i-found-will-shock-you/#15b509eb3c20

[bull....]

IMF Cuts Global Growth Outlook to Lowest Pace Since Crisishttps://www.bloomberg.com/news/articles/2019-04-09/imf-cuts-global-growth-outlook-to-lowest-since-financial-crisis?srnd=premium-asia

us markets consolidating

[bull....]

be a black day in nz for sure when depositers lose all there money

New Zealand is the only OECD country without some form of deposit protection. it means forcing all the mums, dads and their kids with bank deposits to take a financial ‘haircut’ to help shore up a failing bank.

http://www.scoop.co.nz/stories/BU1904/S00267/former-governors-give-limited-support-to-deposit-proposition.htm

yep bank deposits sure are not a safe investment

[dobby41]

yep bank deposits sure are not a safe investment

They may not be zero risk but they are low risk and could be considered safe.
Probably a similar risk to putting it under the mattress.

How good are other countries deposit protections? Anything that guarantees the deposit probably aren't a good idea as they remove the risk indicators and move any risk from the depositor to the Govt.
So you go for the highest rate and forget the risk.

[bull....]

not far to sp500 new highs , big news propelling things

Jamie Dimon says the US economic expansion ‘could go on for yearshttps://www.cnbc.com/2019/04/12/jamie-dimon-says-the-us-economic-expansion-could-go-on-for-years.html

China Exports Rebound After Holiday, Imports Warn of Fragility
https://www.bloomberg.com/news/articles/2019-04-12/china-exports-rebound-after-holiday-while-imports-continue-slide?srnd=premium-asia


yield inversion is an anomoly caused by QE

[Balance]

not far to sp500 new highs , big news propelling things

Jamie Dimon says the US economic expansion ‘could go on for yearshttps://www.cnbc.com/2019/04/12/jamie-dimon-says-the-us-economic-expansion-could-go-on-for-years.html

China Exports Rebound After Holiday, Imports Warn of Fragility
https://www.bloomberg.com/news/articles/2019-04-12/china-exports-rebound-after-holiday-while-imports-continue-slide?srnd=premium-asia


yield inversion is an anomoly caused by QE

QE = Federal Reserve guarantee that US (and world) will not be allowed to go into depression ever again.

So invest with confidence but invest wisely!

[Biscuit]

Jamie Dimon says the US economic expansion ‘could go on for years

https://www.cnbc.com/2019/04/12/jamie-dimon-says-the-us-economic-expansion-could-go-on-for-years.html


He also said it could end tomorrow, no one knows when the next recession will be. Which isn't really news is it?

[Toulouse - Luzern]

be a black day in nz for sure when depositers lose all there money

New Zealand is the only OECD country without some form of deposit protection. it means forcing all the mums, dads and their kids with bank deposits to take a financial ‘haircut’ to help shore up a failing bank.

http://www.scoop.co.nz/stories/BU1904/S00267/former-governors-give-limited-support-to-deposit-proposition.htm

yep bank deposits sure are not a safe investment

Thanks for posting this Bull,

I have strong views on this.
NZ is clearly out of step
The OZ banks Commission gave ample evidence the banks management can not be trusted.
Some would say fraudulent.

The positive is the Govt can reconsider this ... somewhere between guaranteeing everything in the past even the reckless eg South Canterury Finance
and guaranteeing nothing as now. Even today (DomPost article) I see ANZ refused to provide information to the NZ FMA that would have possibly identified earlier identification if Ross investments was a PONZI scheme without the funds to repay investors.

What do others think of no guantees for NZ Bank Deposits?

[GTM 3442]

Anybody who bought South Canterbury Finance bonds under the government guarantee scheme can tell you what a great idea that was. Whats not to like about buying at 70c on the dollar, with a guaranteed maturity of 100c on the dollar, and a yield of +20% in the meantime?

With the masters and guardians of the global financial system (OECD, IMF et al) consistently pressuring the NZ government to introduce some sort of deposit protection arrangement, it's only a matter of time. Expect it to be presented politically as "a move to protect Kiwis from the rapacious Aussie banks"

However, you can expect it to be done "on the cheap". . . forget the Australian 250k figure. . . think more of the Channel Islands arrangements.

[blackcap]

Thanks for posting this Bull,



What do others think of no guantees for NZ Bank Deposits?

I have no problem with it whatsoever. Why should I as a taxpayer bail out other investors who have not done accurate due diligence.

[NeverQuestion]

I have no problem with it whatsoever. Why should I as a taxpayer bail out other investors who have not done accurate due diligence.

Your missing the point perhaps. The world is moving to cashless. Soon you will not be able to keep funds anywhere but in a bank. Personally, all my daily funds are in a bank. "Bail in" means those funds are taken from you to keep the bank solvent. So personally, tax payers funds will make more sense. Or even better, QE. But no matter what way you look at it. You will be paying the bill for excessive risk taking of the banks.

I do agree with you tho. Why should reqular people. Who have no investment knowledge, but have to keep money in the banks for security and pay Bill's, have to bail out a bank? When it was the bank who either, through greed, or mismanagement, get to walk free from it?!

Pretty sure that following "Bail In" there will be limits on how much you can withdraw per week, or even per month. These measures will be in place to prevent bank runs..

Letting a bank fall over will just cause a knock on effect. Best option I see. Tax pay bails out. Nationalize the bank. Use it to pay back the debt to the public...Then sell it down the track to make a return to keep the National supporters happy!

[Baa_Baa]

I have no problem with it whatsoever. Why should I as a taxpayer bail out other investors who have not done accurate due diligence.

Presumably you have a bank account like most of us, possibly with some money in it? If so, it is you and all of us in similar circumstance who are exposed to the 'bail in' theory enabled by law in NZ.

It has little to do with taxpayers, unless there is precedent ... oh, like last time (GFC), the NZ government decided to selectively save some depositors (and the investors in those companies) by saving their bank, or investment company (or insurance company), while letting many others fail, losing millions of $ of depositors money and ruining peoples lives, those who had no power to to change their circumstances.

I agree that the taxpayer shouldn't have to bailout a bank which hits the skids, but unlike any other business that fails, this leverages the depositors (the customers) rather than their investors who made a poor decision, albeit not of their own volition. Perhaps like many, you are ignorant of the possibility that this could ever happen, that a bank could fail, let alone that it is you who is the depositor that suffers the consequences of a bank failure, using your capital to prop them up if the sh1t hits their fan.

The scheme currently is that depositor is the (or one of the) bailout mechanisms to save the investors. Imho, that's disgraceful and should be legislated against. On top of that the banks create over 98% of monetary liquidity in the system through their ability to create money out of thin air. They have become omnipotent, fat with profits, most of which go offshore and are able to manipulate the domestic and political system to such a degree that schemes like this leverage the depositor in bad times to keep their ponzi afloat.

It is far fetched to think the burden of failure of the business should weigh on the shoulders of their depositors, preposterous even! It is the investors problem, they are the owners of the bank.

[winner69]

not far to sp500 new highs , big news propelling things

Jamie Dimon says the US economic expansion ‘could go on for yearshttps://www.cnbc.com/2019/04/12/jamie-dimon-says-the-us-economic-expansion-could-go-on-for-years.html

China Exports Rebound After Holiday, Imports Warn of Fragility
https://www.bloomberg.com/news/articles/2019-04-12/china-exports-rebound-after-holiday-while-imports-continue-slide?srnd=premium-asia


yield inversion is an anomoly caused by QE

Makes the speculators happy ...the more speculating the better ...new highs soon

[kiora]

Your missing the point perhaps. The world is moving to cashless. Soon you will not be able to keep funds anywhere but in a bank. Personally, all my daily funds are in a bank. "Bail in" means those funds are taken from you to keep the bank solvent. So personally, tax payers funds will make more sense. Or even better, QE. But no matter what way you look at it. You will be paying the bill for excessive risk taking of the banks.

I do agree with you tho. Why should reqular people. Who have no investment knowledge, but have to keep money in the banks for security and pay Bill's, have to bail out a bank? When it was the bank who either, through greed, or mismanagement, get to walk free from it?!

Pretty sure that following "Bail In" there will be limits on how much you can withdraw per week, or even per month. These measures will be in place to prevent bank runs..

Letting a bank fall over will just cause a knock on effect. Best option I see. Tax pay bails out. Nationalize the bank. Use it to pay back the debt to the public...Then sell it down the track to make a return to keep the National supporters happy!

To avoid the issue of you being the depositor bailing out the bank only have a revolving credit with any bank for your own liquidity

[blackcap]

Presumably you have a bank account like most of us, possibly with some money in it? If so, it is you and all of us in similar circumstance who are exposed to the 'bail in' theory enabled by law in NZ.


I do but only enough to get me by week by week. It is immaterial and I believe it is for the majority of kiwi's. Those that have $100,000's in term deposits and other investments with banks should not be bailed out, just like if I invest in Snakk or Feltex or any other company that goes under I should not get bailed out. If there was a bail out proviso, it should be restricted to $2,000 or such so that those that can least afford to lose money are protected. But not amounts that are "investable".

[GTM 3442]

If there was a bail out proviso, it should be restricted to $2,000 or such so that those that can least afford to lose money are protected. But not amounts that are "investable".

The trouble with that is that it catches a lot of large sums which are "in transit" (as the Cypriots found out a few years back), such as money for or from property sales and purchases, that sort of thing.

Should push ever come to shove, any bail-out would be a political decision, and we all know what happened last time - politics wins hands down.

[Aaron]

What do others think of no guantees for NZ Bank Deposits?

Sounds like nz is out of step with other developed countries but as we have no deposit insurance it would be good if everyone stopped squealing about the NZ reserve bank requiring trading banks to hold greater reserves. I appreciate the money system might be ponzi in nature so a liquidation might not be possible but in the event of a crisis I would like to see firstly lenders liquidated (at fire sale prices if necessary), secondly shareholders wiped out, thirdly bondholders wiped out and finally depositors to keep whatever is left.

Most bank depositors would be using it as a place to store money and make transactions they would be hardly classified as investors as blackcap classifies them. Gosh they may not even know their own banks credit rating.

Savers and depositors are getting screwed enough through govt legislation in the form of the reserve bank and targeted inflation.

I guess depositors show as unsecured creditors in the trading banks Statement of Financial Position and will be treated as such in a crisis.

[blackcap]

Most bank depositors would be using it as a place to store money and make transactions they would be hardly classified as investors as blackcap classifies them. Gosh they may not even know their own banks credit rating.

.

I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.

[Aaron]

I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.
Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

I agree a govt guarantee for the banks is not equitable and we don't have one, do we? I thought that is why they brought in the Open Bank Resolution to dispel the notion depositors have a taxpayer guarantee for their deposits. We don't even have depositors insurance as many countries do.


A return on investment?? anyone with money in a savings account is in theory losing at a .25% interest rate that means with a 1.9% inflation rate they are losing 1.65% per annum and as we know anything worth saving for, such as a house or shares is rising at a rate much faster than the CPI. To anyone starting out without support the chance of upward mobility looks pretty bleak in the current world, no wonder people are getting angry.

I digress. The issue was what I think of no guarantees for bank depositors I agree with blackcap I don't think a govt guarantee for banks is fair but wonder how depositors insurance works in other countries.

[blackcap]

Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

.

So you just buy stocks without doing any research or anything? Just like the name and park it there? :)

Anyway you don't need to do any due diligence with banks. That is the whole reason for the transparency and reporting requirements. So everyone can have a good look and you would hope the experts would pick up if banks were transgressing too far or if things were getting a bit dodgy.

Yes there is a return on investment. The one that just preserves your capital and ensures inflation does not erode it. What if banks gave you 0% on your deposits. Would you put money in the bank then? Off course not, it would be safer in a fire proof safe.

[Lewylewylewy]

Most people are dumb. Most people don't have time or knowledge to be able to work out whether a bank is safe. The general public need to be looked after, as is the purpose of a government. Bank regulation is required.

Finally, banks don't give a return on money, after tax they barely cover the inflation. Bank is not an investment. It's a company that offers services in exchange for using your money to invest for itself. A pretty good deal for all involved, really. But as banks are required, they have a monopolistic hilt, so again, another reason for regulation. Additionally, they can put economies at risk. One more reason to regulate. Of course over regulation reduces profits and increases customers costs or opportunity cost.

[bull....]

the banks are really starting there scare campaign about the proposed new capital requirements

The Reserve Bank seems to hope the impact would be on bank shareholders, but acknowledges banks could reduce lending or push up prices.
https://www.stuff.co.nz/business/112074061/is-adrian-orr-mr-congeniality-ready-for-a-war-with-farmers

I dont believe for a minute the banks will stop lending ( kiwibank could lend more lol steal there market share) , there s/h will be up in arms about reduced divs , anyway guess its all part of there game to get the RB to back down and if they do we will have the status quo no protections for depositers in nz when the current global party comes to an end.

[JBmurc]

World debt at $250 trillion is 3x global GDP – an all-time record. And if we add unfunded liabilities and derivatives, total debts and liabilities amount to over $2 quadrillion which is 25x global GDP.

This is not going to end well.

[Bjauck]

World debt at $250 trillion is 3x global GDP – an all-time record. And if we add unfunded liabilities and derivatives, total debts and liabilities amount to over $2 quadrillion which is 25x global GDP.

This is not going to end well. Wow that is a lot of debt over-hanging the world. The housing market in Australia with all those high-priced houses is already crumbling.

[Leftfield]

World debt at $250 trillion is 3x global GDP – an all-time record. And if we add unfunded liabilities and derivatives, total debts and liabilities amount to over $2 quadrillion which is 25x global GDP. This is not going to end well.

Be interested to know what's the source for this information? Can you post a link?

[Balance]

Be interested to know what's the source for this information? Can you post a link?

Try this :

https://www.economist.com/content/global_debt_clock

[Aarrgghh]

Try this :

https://www.economist.com/content/global_debt_clock

That webpage is so old the clock stopped in 2015 apparently....

[Balance]

That webpage is so old the clock stopped in 2015 apparently....

Haha - good catch!

Try this one then :

https://www.bloomberg.com/news/articles/2019-01-15/global-debt-of-244-trillion-nears-record-despite-faster-growth

(US$244 trillion)

[JBmurc]

Be interested to know what's the source for this information? Can you post a link?

https://talkmarkets.com/content/bonds/if-you-understand-gold--you-are-not-a-goldbug?post=207760&page=2

[bull....]

sp500 just hitting new highs , see if we close at a new high

[winner69]

sp500 just hitting new highs , see if we close at a new high

Hope the speculators keep on speculating eh.

[BlackPeter]

Hope the speculators keep on speculating eh.

be careful what you wish for .. shorters are speculators as well ;);

[couta1]

I'm keenly waiting to see where the market heads in May-June after reaching these lofty heights.

[Balance]

Have a look at ATM & how the shorters are feeling - that's what this market is doing to those who have been bearish.

[couta1]

Have a look at ATM & how the shorters are feeling - that's what this market is doing to those who have been bearish. Shorting ATM is nuts IMO but then again paying more than you have to if you can help it is also not prudent.

[bull....]

I'm keenly waiting to see where the market heads in May-June after reaching these lofty heights.

yes be interesting. see the yield curve is not inverted anymore was merley a temp blip

[Bjauck]

I do but only enough to get me by week by week. It is immaterial and I believe it is for the majority of kiwi's. Those that have $100,000's in term deposits and other investments with banks should not be bailed out, just like if I invest in Snakk or Feltex or any other company that goes under I should not get bailed out. If there was a bail out proviso, it should be restricted to $2,000 or such so that those that can least afford to lose money are protected. But not amounts that are "investable".
With asset (shares and property) prices at high levels, where should someone with say $NZ 1,000,000 place their money for safe capital preservation?

[777]

With asset (shares and property) prices at high levels, where should someone with say $NZ 1,000,000 place their money for safe capital preservation?


Have you sold your ATM shares?

[Bjauck]

Have you sold your ATM shares? Not all of them. I have reduced my holding in the last several months! Not anywhere near as much as a $ million...

I was referring to a hypothetical Million - About the value of an average Auckland house.

[BeeBop]

This is a problem that I grappled with early last year....net outcome was property looking at quality (I had intended to reduce my property portfolio by one). I also considered giving the funds to my bank for management (private banking) but couldn't stomach the %10K p.a. fee onto of the fund fees that were already charged (and they seemed to know less than me and were too prudent)...kept the property and funneling the cash (mortgage free on that one) into a conservative income generating managed fund (yes, paying fees) but currently getting a 6.65% net return with quarterly payments that are reinvested. I had also considered sending the funds off-shore to join my other funds but again, property was my answer (as things in Jan/Feb '18 seemed too hot) and I didn't want to hold property in another country without living in it. I think the NZX is a bit overpriced in the blue chip area and am not prepared to hold much in there, someone else I know has moved there %1m+ portfolio to Australia (they are income seekers). Glad I decided on property (I can use it for leverage for a new project) and an income fund....capital has been preserved and I can sleep at night.

[winner69]

Bull... this a good sign eh

https://www.bloomberg.com/news/articles/2019-04-26/hedge-funds-are-shorting-the-vix-at-a-rate-never-seen-before

[Brain]

There is an article on Warren Buffet in the Saturday herald which is worth a read.

For me The most interesting Buffet quote from the article is the following.


”People get smarter but they don’t get wiser. They don’t get more emotionally stable. All the conditions for overvaluation and undervaluation absolutely exist, the way they did 50 years ago.
You can teach all you want to the people, you can tell them to read Ben Graham’s book, you can send them to graduate school, but when they are scared, they’re scared.”

He didn’t mention Greed.

[winner69]

There is an article on Warren Buffet in the Saturday herald which is worth a read.

For me The most interesting Buffet quote from the article is the following.


”People get smarter but they don’t get wiser. They don’t get more emotionally stable. All the conditions for overvaluation and undervaluation absolutely exist, the way they did 50 years ago.
You can teach all you want to the people, you can tell them to read Ben Graham’s book, you can send them to graduate school, but when they are scared, they’re scared.”

He didn’t mention Greed.

Cool ...the greedy ones don’t get scared

[winner69]

Useless fact ......lots more babies going to be born in the next year as usual

As markets rise to new highs conception rates increase (and vice versa)

[BlackPeter]

Useless fact ......lots more babies going to be born in the next year as usual

As markets rise to new highs conception rates increase (and vice versa)

Might not be such a useless fact ... time to buy ATM and start accumulating EVO :p?

[Balance]

There is an article on Warren Buffet in the Saturday herald which is worth a read.

For me The most interesting Buffet quote from the article is the following.


”People get smarter but they don’t get wiser. They don’t get more emotionally stable. All the conditions for overvaluation and undervaluation absolutely exist, the way they did 50 years ago.
You can teach all you want to the people, you can tell them to read Ben Graham’s book, you can send them to graduate school, but when they are scared, they’re scared.”

He didn’t mention Greed.

Nor did he mention Hope?

[winner69]

Might not be such a useless fact ... time to buy ATM and start accumulating EVO :p?

Fertility as a leading economic indicator ...if you like reading academic stuff with your Sunday coffee

https://www3.nd.edu/~kbuckles/BHL_fertility.pdf

[BlackPeter]

Fertility as a leading economic indicator ...if you like reading academic stuff with your Sunday coffee

https://www3.nd.edu/~kbuckles/BHL_fertility.pdf

In that case Africa must have an extremely bright economic future if we look at the sound base of their population pyramid ;); Lots of fertility;

10504


China on the other hand does not look that flash:

10505

you sort of wonder whether their shrinking female population in child bearing age is still able to stem oblivion.

But so, may I add does the US (not looking very reproductive - I worry for their economic future ... I really do):

10506

This stats includes only the first Trump year, but it looks like he is bad for reproduction. Not fair on the man that his fellow citizens ask him to do it all alone ;); The man can pay only that many prostitutes, can he ...

Maybe Russia's future looks a bit better - their reproduction is growing (though from a quite un-reproductive base, if I may say so ...):

10507


However - I am not saying that the paper is wrong. Need to do some research on the South Sudanese stock exchange.

PS: If you like the pyramids - here are more: https://www.populationpyramid.net/

[winner69]

Cool charts BP ....bookmarked that site

But totally irrevelent (although is demographic data) to that paper which said 'Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short -run expectations about the economy than previously thought.' (posted in case you didn't even read the abstract)

[BlackPeter]

Cool charts BP ....bookmarked that site

But totally irrevelent (although is demographic data) to that paper which said 'Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short -run expectations about the economy than previously thought.' (posted in case you didn't even read the abstract)

Not so fast - long term these data will (even without academical research) clearly make an impact on the economy. More people, more workers, more consumption. No-brainer.

More interesting is the short term dependency ... and if your research says that fertility indicates shortterm a good economy, than Africa must clearly be in a golden position.

Obviously - economic progress is relative to where you are, but at some stage I am sure they will take over the US as well as China.

Anyway - nice games ...

[jonu]

Interesting discussion. Without looking deeply at the various examples...my first thoughts are that a solid population pyramid is something akin to kinetic potential. Without it you have limited means of moving forward.

[777]

I like the kiribati one. Are we not told that it will be under water some time this century yet the population is expected to double by 2100.

https://www.populationpyramid.net/kiribati/2018/

[winner69]

All this stuff Fed doing to keep the markets going up is the antithesis of capitalism .....and every step the closer we get to socialism

[Biscuit]

All this stuff Fed doing to keep the markets going up is the antithesis of capitalism .....and every step the closer we get to socialism


If the Government were printing money to buy assets then that would be the opposite of capitalism (assets owned privately). But are they doing that? Isn't it more that the govt is printing money and essentially lending it out, ie buying "financial assets". The money is presumably being invested into property and businesses by third parties who are the "owners". So, capitalism alive and well for the moment. Until it all goes horribly wrong at which point the govt and/or the banks will end up owning a whole load of bankrupt businesses and foreclosed properties. I guess a publicly-funded process of retaining quality assets in private ownership while transferring the most dodgy and bankrupt assets to public ownership could be regarded as a form of socialism.

[winner69]

If the Government were printing money to buy assets then that would be the opposite of capitalism (assets owned privately). But are they doing that? Isn't it more that the govt is printing money and essentially lending it out, ie buying "financial assets". The money is presumably being invested into property and businesses by third parties who are the "owners". So, capitalism alive and well for the moment. Until it all goes horribly wrong at which point the govt and/or the banks will end up owning a whole load of bankrupt businesses and foreclosed properties. I guess a publicly-funded process of retaining quality assets in private ownership while transferring the most dodgy and bankrupt assets to public ownership could be regarded as a form of socialism.

Socialism for the top 1% it is

Although some might call it fascism

[bull....]

no change fed

Fed holds rates steady, citing lack of inflation pressurehttps://www.cnbc.com/2019/05/01/fed-leaves-rates-unchanged.html

just like evrywhere else no inflation



other big news


China and the US are reportedly very close to resolving a key sticking point to a trade deal
https://www.cnbc.com/2019/05/01/china-and-the-us-are-reportedly-very-close-to-resolving-a-key-sticking-point-to-a-trade-deal.html


Cannabis fans everywhere may get their wish as Oreo-maker Mondelez eyes CBD-infused snacks
https://www.cnbc.com/2019/05/01/cannabis-fans-may-get-wish-as-oreo-maker-mondelez-eyes-cbd-snacks.html

[sb9]

no change fed

Fed holds rates steady, citing lack of inflation pressure

https://www.cnbc.com/2019/05/01/fed-leaves-rates-unchanged.html

just like evrywhere else no inflation



other big news


China and the US are reportedly very close to resolving a key sticking point to a trade deal


https://www.cnbc.com/2019/05/01/china-and-the-us-are-reportedly-very-close-to-resolving-a-key-sticking-point-to-a-trade-deal.html


Cannabis fans everywhere may get their wish as Oreo-maker Mondelez eyes CBD-infused snacks


https://www.cnbc.com/2019/05/01/cannabis-fans-may-get-wish-as-oreo-maker-mondelez-eyes-cbd-snacks.html

Bid drop in Dow overnight, "sell in May and go away" coming up perhaps??

[bull....]

Bid drop in Dow overnight, "sell in May and go away" coming up perhaps??

US indices all banging against the top of huge range , ive reduced my exposure to stocks just last week will be waiting to see what happens. trade deal could be a sell the moment thing as well if its factored into prices. time to be nimble see what happens

[sb9]

US indices all banging against the top of huge range , ive reduced my exposure to stocks just last week will be waiting to see what happens. trade deal could be a sell the moment thing as well if its factored into prices. time to be nimble see what happens

The much talked "trade deal" between US and China could turn out to be a fizzer imo.

Have sold few stocks last month to keep my powder dry, just in case market turns custard.

[bull....]

not a good start to us markets for the start of may

Dow falls 150 points, stocks fall for a second day after Fed Chief Powell signals no rate cut soonhttps://www.cnbc.com/2019/05/02/stock-market-traders-digest-fed-comments-earnings-and-jobless-data.html


other big news


https://www.cnbc.com/2019/05/02/beyond-meat-ceo-were-focused-on-the-meat-industry.html

Shares of Beyond Meat rocketed up 135% in its public market debut Thursday.

the meat industry disruptors are coming

[blackcap]

Come on peeps, a 150 point drop on an index of 26,000 is not a big move. Lets talk %es and then that puts things in perspective. Only down 0.6%, nothing to see here move on.

[sb9]

https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.html

Going to be nasty week I guess...

[couta1]

https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.html

Going to be nasty week I guess... The Trumpet mouthing off again.Lol

[percy]

https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.html

Going to be nasty week I guess...

I should have sold on 1st May and gone away.!

[sb9]

I should have sold on 1st May and gone away.!

In the middle of cheap money and market going higher and higher, it always looks for an excuse to sell off at the slightest available window of opportunity.

[see weed]

I should have sold on 1st May and gone away.!
Maybe May/June is a good time to buy when everyone is selling.

[percy]

Maybe May/June is a good time to buy when everyone is selling.

Right on.!
I love your attitude.
Always "well positioned".

[janner]

I should have sold on 1st May and gone away.!

We are Perc.. Not selling .. Just going away for 3 months in Vodka land, enjoying the sun.
Waiting and watching for HGH to keep putting more sunshine into our lives..

[percy]

We are Perc.. Not selling .. Just going away for 3 months in Vodka land, enjoying the sun.
Waiting and watching for HGH to keep putting more sunshine into our lives..

HGH have a great history of putting more sunshine into our lives.
Bigger exposure in Aussie will add even more sunshine.
Have a good trip.

[bull....]

re action in US markets not to savage at the moment how ever with 2 possible binary outcomes this week things could get very savage and very quick. will be interesting for sure

[couta1]

re action in US markets not to savage at the moment how ever with 2 possible binary outcomes this week things could get very savage and very quick. will be interesting for sure Yep currently down less than the NZX was yesterday, nothing to see here. PS-A cut in our OCR this week will see further support for solid divvy paying stocks.

[bull....]

Yep currently down less than the NZX was yesterday, nothing to see here. PS-A cut in our OCR this week will see further support for solid divvy paying stocks.

yes big day in rba aus land today and rbnz land tomorrow both prriced at around 50% either way adds to potentially big moves in fx and markets

[minimoke]

Dow uo .50% at the moment

[Aaron]

Well that was disappointing. Every mention of a trade deal has pushed the market higher. I guess Trump's tweet could be seen as a deal being concluded sooner or whatever positive spin you care to put on it.

[couta1]

Well that was disappointing. Every mention of a trade deal has pushed the market higher. I guess Trump's tweet could be seen as a deal being concluded sooner or whatever positive spin you care to put on it. Trump just tweets before thinking and the market is getting used to the hot air rhetoric now.

[winner69]

Well that was disappointing. Every mention of a trade deal has pushed the market higher. I guess Trump's tweet could be seen as a deal being concluded sooner or whatever positive spin you care to put on it.

Aaron, Your day will come sometime, maybe soon or maybe later

It was six years ago somebody predicted a 60% collapse of the S&P500 .....maybe your time is six years away still.

[couta1]

Aaron, Your day will come sometime, maybe soon or maybe later

It was six years ago somebody predicted a 60% collapse of the S&P500 .....maybe your time is six years away still. Lol or 6x6x6 =666.

[BlackPeter]

Lol or 6x6x6 =666.

Are you sure? We learned at school the result of this formula is 216 ... but admittedly, this was a long time ago, might have changed since then ;);

[couta1]

Are you sure? We learned at school the result of this formula is 216 ... but admittedly, this was a long time ago, might have changed since then ;); Yes I know but 216 doesn't have the same connotations now does it.

[bull....]

gee just caught a quick nap missed heaps of action , no sleep this week lol

U.S. Says It Will Raise Tariffs After China Reneges on Vows
https://www.bloomberg.com/news/articles/2019-05-06/u-s-says-it-will-raise-tariffs-after-china-reneges-on-promises?srnd=premium-asia

last night was always gonna rally its what happens rest of week what matters



“It’s a nail-biting decision and frankly we’re very, very uncertain about it, but we think it’s slightly more likely that they’ll cut the OCR,” said Dominick Stephens, chief New Zealand economist at Westpac Banking Corp

https://www.bloomberg.com/news/articles/2019-05-06/rbnz-seen-poised-to-cut-interest-rates-as-kiwi-economy-cools?srnd=premium-asia

if rbnz doesnt cut expecting big jump in dollar even bigger if au drops rates

[Aaron]

Aaron, Your day will come sometime, maybe soon or maybe later

It was six years ago somebody predicted a 60% collapse of the S&P500 .....maybe your time is six years away still.

Maybe its decades away if we look at Japan as a world leader trying to get growth in a world that is aging or trying to level off (human population wise) except central banks and economists don't want it to happen because of their f**ked up theories.

Craziness, read the first paragraph of this article. Actually it is in the title of the link. The balance sheet that stimulates the economy is larger than the economy it stimulates?????
https://www.reuters.com/article/us-japan-economy-boj/bank-of-japans-balance-sheet-now-larger-than-countrys-gdp-idUSKCN1NI07Z
Not sure why they don't buy up the whole world. NZ would be a good start as we don't seem to have a problem selling out to foreigners.

[winner69]

Yes I know but 216 doesn't have the same connotations now does it.

So true

As they say ”Imagination is more important than knowledge.” ...Being exactly correct is so boring

[winner69]

Well that was disappointing. Every mention of a trade deal has pushed the market higher. I guess Trump's tweet could be seen as a deal being concluded sooner or whatever positive spin you care to put on it.

But then again your day may never come — as I told you the other day the govt/Fed manipulation is taking the US away from capitalism to socialism — socialism for the 1%

Could even be described as fascism

[Aaron]

But then again your day may never come — as I told you the other day the govt/Fed manipulation is taking the US away from capitalism to socialism — socialism for the 1%

Could even be described as fascism

Once the world central banks own everything it will make the switch easier.

[bull....]

the real action just beginning. all the indices respecting resistances , will we go back too the bottom of the ranges ? friday lol

[couta1]

the real action just beginning. all the indices respecting resistances , will we go back too the bottom of the ranges ? friday lol Who knows, it's all a bit fickle but can I say a big thank you to the Trumpet for enabling me and others to pick up panic discounted shares.

[cymonger]

Who knows, it's all a bit fickle but can I say a big thank you to the Trumpet for enabling me and others to pick up panic discounted shares.


Yep. Grabbed all of the ATM I could buy the other day when it dipped back into the 15's. Expecting the same today. In some ways Trump's big mouth makes the market easy to predict. He says something stupid, the market dives, and then we're back in a good place a couple of weeks (even days) later.

[bull....]

Who knows, it's all a bit fickle but can I say a big thank you to the Trumpet for enabling me and others to pick up panic discounted shares.

think your have plenty more opportunities soon.

Did you know when the vix front month is higher than than longer mths it means volatilty is going to be around for a while

[see weed]

Yep. Grabbed all of the ATM I could buy the other day when it dipped back into the 15's. Expecting the same today. In some ways Trump's big mouth makes the market easy to predict. He says something stupid, the market dives, and then we're back in a good place a couple of weeks (even days) later.
It was in the 14s two weeks ago. Buy half now and the rest in the 14s. if it doesn't go back to the 14s then.....

[bull....]

big day ahead tariff deadline in next 24hrs

[dr_]

big day ahead tariff deadline in next 24hrs


Final hour begin to take place Trump's tariff increase. Effective at 4pm NZT today. ;) Unless they come to some sort of agreement.

[couta1]

Final hour begin to take place Trump's tariff increase. Effective at 4pm NZT today. ;) Unless they come to some sort of agreement. More rhetoric will be followed by another extension followed by more rhetoric.

[dr_]

More rhetoric will be followed by another extension followed by more rhetoric.

Look that way. The deadline will end today but hike won't take effect for weeks. in mean time trump will play with market with his tweets..wash, rinse and repeat

[Baa_Baa]

Very muted response from the futures bourse at this stage. Might change overnight, but surprising so far.

[bull....]

Look that way. The deadline will end today but hike won't take effect for weeks. in mean time trump will play with market with his tweets..wash, rinse and repeat


this will play out for a long time yet

[Baa_Baa]

this will play out for a long time yet

Look what happened after hours,

“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports. The President also ordered us to begin the process of ... " (emphasis added)

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/may/statement-us-trade-representative

[Blue Skies]

this will play out for a long time yet

I won't pretend to be well informed but with preparations for grand celebrations looming in October to commemorate the 70th anniversary of Mao founding the Peoples Republic of China, can imagine President Xi Jinping feeling some urgency to get the distraction of these negotiations resolved well beforehand, 1) to save face & 2)' to prevent social & economic risks evolving into political risks ' - Chen Yixin, Secretary Gen of parties Law & Order committee.
With US elections just over the horizon, Trump also needs to be seen to 'close the deal' for his base.
I think the markets now expect they will reach a watered down agreement in the next month or two which enables both sides to claim success & move forward again.

[bull....]

Look what happened after hours,

“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports. The President also ordered us to begin the process of ... " (emphasis added)

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/may/statement-us-trade-representative

trump has given them 1 mth or as above additional tariffs will go into effect meaning all chinese imports will be tariffed

[bull....]

I won't pretend to be well informed but with preparations for grand celebrations looming in October to commemorate the 70th anniversary of Mao founding the Peoples Republic of China, can imagine President Xi Jinping feeling some urgency to get the distraction of these negotiations resolved well beforehand, 1) to save face & 2)' to prevent social & economic risks evolving into political risks ' - Chen Yixin, Secretary Gen of parties Law & Order committee.
With US elections just over the horizon, Trump also needs to be seen to 'close the deal' for his base.
I think the markets now expect they will reach a watered down agreement in the next month or two which enables both sides to claim success & move forward again.

China Names Its Trade-Deal Price as Trump Sets New Deadline
https://www.bloomberg.com/news/articles/2019-05-11/china-names-its-trade-deal-price-as-trump-sets-month-deadline?srnd=premium-asia

looks like they are both digging in for the long game now , how i read it.? trump has bi partisan support now for the long game and china being an autocrat do as they please in the parties interest.

[bull....]

Very muted response from the futures bourse at this stage. Might change overnight, but surprising so far.

stocks rose on friday , surprise to lots of people a. Im no tariff expert but dont tariffs hurt the consumer in the US but in the long run US companies will make more money from this shifting of supply chains. China companies will shift business to other countries as well but china people will lose there jobs. trade deficit between china and US will decline key point in trump electioneering but trade deficits with other less competitive countries goes up. some manufacturing may even go to US who knows? im no expert on these matters

[Lewylewylewy]

Is anyone else concerned that China will retaliate eye 4 an eye, damaging the two largest economies, sending the world into recession?

[BeeBop]

Things will still get bought, they will get made, they will get sold....just the locations may ‘adjust’....I don’t see a recession in the near term....just stay hedged, or if you aren’t hedged, be really convinced. Or keep most money in NZ - seems to be a bit immune!

[Lewylewylewy]

Thanks bb, i can't help feeling that as China trade drops off, Americans and others will bring their money back to the usd, causing the nzx to drop due to lack of investment. I expect the next event (of poor nz company performance due to China demanding less from nz as they're poorer and business is less) could cause people to sell underperforming shares at a loss, meaning less money in nz, having a knock on effect in house prices and the economy.

... i suppose that's about the worst case scenario, so maybe im being overly pessimistic, but it doesn't seem like too much of a stretch at the moment.

I guess i should wait to see what China do. Sitting on about 80% cash in my portfolio at the moment and hoping im doing the wrong thing.

[cymonger]

I see your points on Trump, tariffs, etc. but Trump really can't afford a protracted trade war that tanks the market in America. The days of landslide elections in America are over. The country is going to be split damn near down the middle in the 2020 election, and a crashed market is enough to tip the scales. His likely opponent Joe Biden is from the EXACT region that put Trump over the top in the last election, and neutralizes a lot of his advantage there. I think Trump finds a way out here, if only for his own self-survival (his obvious highest priority).

[Lewylewylewy]

That's a good point, and i agree. I think that trump is certainly keen to get reelected, but what im not sure about is how his ego will factor into this. From what i can see, trump's ego is one of his largest drivers, and he always needs to win, or convince himself that he's won (which usually involves trying to convince others).

Given this, and that he seems to be not that smart, and possibly have some mental issues (possibly dementia amongst other things)... I'm not really sure how he's going to act. The result might not be rationalized in his mind, the same way it could be in others.

I don't think he's going to get another term, but then Americans live stoopid presidents. I suspect (as China seems to) that he'll have to wrap this up closer to the elections. The alternative might be, him not backing down (because then he feels like he's lost) and trying to convince the public that the trade war he put in place is a good looking term solution. (For his ego).

[blackcap]

I don't think he's going to get another term, but then Americans live stoopid presidents. I suspect (as China seems to) that he'll have to wrap this up closer to the elections. The alternative might be, him not backing down (because then he feels like he's lost) and trying to convince the public that the trade war he put in place is a good looking term solution. (For his ego).

Why do you think that he will not get another term? He is favoured by the markets to get another term. Admittedly it is close but he is the front runner at this point in time.

[BeeBop]

I guess i should wait to see what China do. Sitting on about 80% cash in my portfolio at the moment and hoping im doing the wrong thing.

if you have short term commitments, just make sure you have the cash for these (I do and mine sits in a 0% earning account - no interest available to me). Then think that for every 3 steps forward, there may be 2 steps back BUT you are still one step ahead anyway. If you can tolerate that...all may be ok?

I put cash back into the market on January 3rd, and even as of today, I am ahead of the highs of last year. I bought into three NZ stocks, Asia, topped up UK Property, and got into a USA infrastructure ETF that has a global portfolio (the yield on it is nice)....even if it is backwards, the exchange rates and yields may do me quite nicely....if you are nervous, go back to the fundamentals and steer clear of any inflated past growth stocks. And for sure...keep cash for the short-term. But I can afford to lose all of my portfolio and that won’t happen easily - it didn’t even happen in the GFC because companies till make things and people still buy stuff, and people still generally brush their teeth.

[Lewylewylewy]

Good advice, and i think the stock market agrees with you today.

Im thinking that maybe im overly concerned... if the tariffs go onto products that already have exorbitant tariffs on them, then maybe companies effected by this are already ukered. I.e. not much more damage to do. I do anticipate the Chinese to be smarter about their tariff retaliation (assuming they retaliate with tariffs), they won't want to kill the goose, they just want to give it a kick.

Ty for lending this worrier your clear head.

[Blue Skies]

Is anyone else concerned that China will retaliate eye 4 an eye, damaging the two largest economies, sending the world into recession?

Yes, I think everyone is concerned or should be. However, personally I'm optimistic agreement will be reached as both sides have too much to lose.
I remember Nicky Haylee (recently retired US UN Ambassador) saying something along the lines of, Trumps unpredictability & impetuousness actually helped their negotiators as the other side found him difficult to read & how far to push.

What's that saying...'When elephants fight, it's the grass that gets trampled."

[Lewylewylewy]

I imagine that trump will end up making some kind of agreement, which will likely having nothing of substance, then tell everyone how he died those Chinese out. Just curious about the state of the grass until then

[bohemian]

I think this will fester for quite some time. The Chinese almost did agree to many issues but got brought back by Xi for what I think are other reasons. As for the US why would they be too worried with a GDP growth of 3.2 % and low unemployment. The main losers are US farmers but they live up Trump's.... so why would Trump be worried.

[BlackPeter]

I think this will fester for quite some time. The Chinese almost did agree to many issues but got brought back by Xi for what I think are other reasons. As for the US why would they be too worried with a GDP growth of 3.2 % and low unemployment. The main losers are US farmers but they live up Trump's.... so why would Trump be worried.

I suspect that US consumers and companies will find out that many things will get dearer if they have to pay 25% on all Chinese imports like cell phones, computers, other electronics, resources (like rare earths - more than 80% of world production comes from China) and textiles. Even Trumps MAGA caps will be more expensive (which might be a good thing). There is lots of stuff where there is just no alternative to buy somewhere else.

Trump is basically putting a heavy tax on his people, and while I agree that many of them must be quite stupid (otherwise they would not have picked him in the first place), they can't be that stupid not to notice that their pay check will be rapidly eroding ...

Just boys playing chicken ...

[Lewylewylewy]

Im not concerned about consumer stuff increasing in price, more about costs to companies, making those companies uncompetitive. It's like an ecosystem; you don't know what the effect of killing one business or industry will have on others.

Consumers can handle more expensive goods, but businesses might not be able to handle increased costs. Especially business relying on volume to make low margin business work.

[King1212]

Typical US....bullying other nations

[value_investor]

The irony in modern times is that companies just pass these tariffs along to their consumers which just makes the average American worse off.

Still think the valuations in the US markets are very high, would have to come down substantially for me to get into the S&P500 which I would like to hop on at some point.. I'm happy for this trade war to run its course and bargains to present itself. Expect volatility to return in a big way for the rest of 2019.

[Joshuatree]

80% of all fake products including patent infringing ones come from China(turkey is the next biggest with 3%) source CNBC. This is one big sticking point in the trade negotiations that won't be resolved quickly.

[JBmurc]

Typical US....bullying other nations

China makes 80% of the world counterfeit goods exported around the world(In second place Turkey with 3%) undermining patents companies and consumers **** China IMHO

Or that worthless cheap nasty consumer goods Chinese crap that breaks after its second use. then goes into filling our landfills

[JBmurc]

LOL great minds think alike JT >>>>

[peat]

but if you make say 80% of the worlds stuff then you;'re going to make 80% of the counterfeit stuff too without it becoming an anti-Sino justification ?

(Just sayin)

[JBmurc]

but if you make say 80% of the worlds stuff then you;'re going to make 80% of the counterfeit stuff too without it becoming an anti-Sino justification ?

(Just sayin)

So your all for Chinese companies stealing I.P(breaking patent laws) copying your product and then selling it with no issues through there state-controlled Alibaba express back to your prospective buyers ??

Also you like synthetic drugs being pumped into our communities ...
https://www.nytimes.com/times-insider/2015/06/23/synthetic-drug-manufacturing-is-an-open-secret-in-china/

Personal I'm not a fan Of the CCP- greatest threat to freedom of the world and free market democracy IMHO

https://www.nytimes.com/2019/05/13/nyregion/amnesty-international-lease-china.html

Mao Zedong, the founder of the People's Republic of China, qualifies as the greatest mass murderer in world history
https://www.independent.co.uk/arts-entertainment/books/news/maos-great-leap-forward-killed-45-million-in-four-years-2081630.html

Really I could fill pages of the issues I have with the CCP ... yes, the Chinese were treated poorly by the English Empire in the past ...but If the CCP wants to be part of the WTO why don't they have to toe the line?

[King1212]

U must be one of trump friends

[Lewylewylewy]

Chinas retaliation doesn't seem so bad to me. No attacks on products used as parts for business, mainly just consumer stuff. Consumers can suck it up or just not buy those products as much.

[BlackPeter]

So your all for Chinese companies stealing I.P(breaking patent laws) copying your product and then selling it with no issues through there state-controlled Alibaba express back to your prospective buyers ??

Also you like synthetic drugs being pumped into our communities ...
https://www.nytimes.com/times-insider/2015/06/23/synthetic-drug-manufacturing-is-an-open-secret-in-china/

Personal I'm not a fan Of the CCP- greatest threat to freedom of the world and free market democracy IMHO

https://www.nytimes.com/2019/05/13/nyregion/amnesty-international-lease-china.html

Mao Zedong, the founder of the People's Republic of China, qualifies as the greatest mass murderer in world history
https://www.independent.co.uk/arts-entertainment/books/news/maos-great-leap-forward-killed-45-million-in-four-years-2081630.html

Really I could fill pages of the issues I have with the CCP ... yes, the Chinese were treated poorly by the English Empire in the past ...but If the CCP wants to be part of the WTO why don't they have to toe the lie?

No question - China is in this contest clearly not coming out smelling like roses. They did have murderous phases in their past, they do have a government without democratic legitimation and little respect for any human rights.

Some of the issues Trump is highlighting (like IP theft and unfair conditions for foreign companies operating in China) are justified and worthwhile to fight against, some other of his issues (like unbalanced bilateral trade balance) are just demonstrating his limited understanding (or better the lack thereof) of the economic system.

Problem is that Trump is in no way better than Xi, he only operates in a system which restricts his powers a bit more. Problem is that he is a repulsive bully who takes on everybody - friend and allies - at the same time to demonstrate his strength, instead of forming a big coalition of allies helping to move China from its dark ways to the "bright side". Trump is basically p*ssing against everybodys legs and likely to ensure this way that China's power will increase rather than diminish.

Nobody likes a bully.