Black Monday

[bull....]

Covid-hit Japan now paying banks to lend
https://asiatimes.com/2020/08/covid-hit-japan-now-paying-banks-to-lend/

[bull....]

carrying on the talk about utilities in NZ being in demand at the moment heres some data to back it up

NZX index from 21/7/2020 is up roughly 1.51% as of friday
NZX Utilities index is up 7.21% in the same time frame
the NZ 10 yr bonds have fallen 23.45% in the same time frame from .81 to .62%

All of this started around the last RBNZ meeting and the announcement of increase in QE to 100 billion .
Now you can clearly see bonds have been the best place to make money in the time frame and likely going forward ( as ORR wants lower rates) but also that because of the QE soaking up the available bonds money needs to find a home , so is flowing into bond proxies like gentailers etc (utilities) as they provide the next best thing to stable returns.
these trends probably likely to continue my assumption as RBNZ has only made a commitment to march next year not to go negative so people will likely front run the expectation of dramatically lower rates next next year , effects of this are lower mortgage rates and much lower term deposits and my assumption of any stock with stable dividends being in demand.

[Bjauck]

Biggest NZ bank predicts negative interest rates



Most of New Zealand’s bank economists now expect that the official cash rate will slip below zero in April next year.

https://www.stuff.co.nz/business/money/300085277/into-the-twilight-zone-we-go-biggest-bank-predicts-negative-interest-rates

get your income why you can



...or capital gaIns?

Bank deposits, already returning below the inflation rate, have a further tax cut taken from their already below inflation returns.

[bull....]

As banks take their cues from the RBNZ, the main banks push harder to lower the cost of interest paid to customers in a taste of what is to come

https://www.interest.co.nz/news/106667/banks-take-their-cues-rbnz-main-banks-push-harder-lower-cost-interest-paid-customers


Separately, the RBNZ announced that it would increase its bond buying for this week. The RBNZ will buy $1.35b of government bonds this week, up from $1.09b last week and $940m the week before. Unlike earlier this year, the RBNZ has chosen not to skew purchases towards the long-end of the curve. The decision to increase purchases two weeks in a row is a clear signal that Bank staff, under the MPC’s broad directive, will try to use bond buying to push local rates lower in advance of a likely OCR cut to negative next year.

https://www.interest.co.nz/currencies/106687/us-equity-markets-nudge-higher-again-led-big-tech-global-rates-drift-lower-powells

[Snoopy]

Simplicity Offers Record Low 2.25% Mortgage, And Predicts Rates Will Go Lower
https://www.scoop.co.nz/stories/BU2008/S00347/simplicity-offers-record-low-225-mortgage-and-predicts-rates-will-go-lower.htm

there's sustained buying in the dividend stocks, but not too late .... "get your income while you can" term deposits are going lower


"Invest in haste and it could all go to waste." William 'Tubby' Shakesphere (no relation)

I have to admit to being an admirer of Sam Stubb's "Simplicity" and his stated intent to drive down industry management fees. But I wonder if this move into mortgages is a step too far? I heard a radio interview with Stubbs in which he stated that he intended to fund this mortgage lending from kiwisaver funds. Instead of putting kiwisavers money into the bank at a 1% interest rate or less, Stubbs would put it into a mortgage fund where investors get double a bank interest rate return, and house buyers get a below bank market mortgage rate - a win win. Stubbs also said that first home buyers constituted the lowest mortgage market risk, That last statement certainly raised my eyebrows. Wouldn't a mid-career person with a much lower mortgage, with half of it already paid down, be a lower risk than a first time buyer? I do wonder what risk management strategy Stubbs might have in place.

If professional players can have their judgement affected in this low interest rate environments, what does that say for the rest of us? Those who rushed to buy Contact Energy at $9 to secure an income stream, could now spend more than a decade trying to bank their income just to get back to the start point where their capital losses are recovered. A great utility can still be overpriced and make a terrible investment because of that. Fear of Missing Out (FOMO) will in general lead to poor investment decisions, as people overpay for what they think is a 'safe income paying investment'. Unforeseen crises will see to it that the thinking investor will not be too late to grab investment opportunities, even if they have to exercise some patience. Earning 1% on a bank term deposit or less might be a bitter pill to swallow. But it beats losing 20% of your capital on an investment that has not been thought through. My message to investors at this time is 'Be patient' and 'Be careful'. With FOMO we may be entering a period of investor foolishness, where experienced investors can sell certain utility investments at overinflated prices to the FOMO crowd. Cashing up on the madness (or putting it in the can investment parlance slang) may prove to be the way to and prevent you becoming a penny constrained old fool.

Bull says "Get your income while you can!" I would caution that a better investment slogan for our times might be: "Can your income investment, before you become a git"

SNOOPY

[stoploss]

"Invest in haste and it could all go to waste." William 'Tubby' Shakesphere (no relation)

I have to admit to being an admirer of Sam Stubb's "Simplicity" and his stated intent to drive down industry management fees. But I wonder if this move into mortgages is a step too far? I heard a radio interview with Stubbs in which he stated that he intended to fund this mortgage lending from kiwisaver funds. Instead of putting kiwisavers money into the bank at a 1% interest rate or less, Stubbs would put it into a mortgage fund where investors get double a bank interest rate return, and house buyers get a below bank market mortgage rate - a win win. Stubbs also said that first home buyers constituted the lowest mortgage market risk, That last statement certainly raised my eyebrows. Wouldn't a mid-career person with a much lower mortgage, with half of it already paid down, be a lower risk than a first time buyer? I do wonder what risk management strategy Stubbs might have in place.

If professional players can have their judgement affected in this low interest rate environments, what does that say for the rest of us? Those who rushed to buy Contact Energy at $9 to secure an income stream, could now spend more than a decade trying to bank their income just to get back to the start point where their capital losses are recovered. A great utility can still be overpriced and make a terrible investment because of that. Fear of Missing Out (FOMO) will in general lead to poor investment decisions, as people overpay for what they think is a 'safe income paying investment'. Unforeseen crises will see to it that the thinking investor will not be too late to grab investment opportunities, even if they have to exercise some patience. Earning 1% on a bank term deposit or less might be a bitter pill to swallow. But it beats losing 20% of your capital on an investment that has not been thought through. My message to investors at this time is 'Be patient' and 'Be careful'. With FOMO we may be entering a period of investor foolishness, where experienced investors can sell certain utility investments at overinflated prices to the FOMO crowd. Cashing up on the madness (or putting it in the can investment parlance slang) may prove to be the way to and prevent you becoming a penny constrained old fool.

Bull says "Get your income while you can!" I would caution that a better investment slogan for our times might be: "Can your income investment, before you become a git"

SNOOPY

Snoopy I think his biggest problem is he is lending obviously a % or portion of his total Kiwisaver fund. What if the performance is average or the company for whatever reason gets into trouble and 20 % of his Kiwisaver customers just switch funds which would take them less than 5 minutes to do ... Does he call in the mortgages to balance the fund ?

[bull....]

your behind the curve snoopy its all about fomo and momo now fundamentals are out of vogue or irrelevant mostly in this environment of mass money printing.
why your cen example is correct it really ran far ahead of all other gentailers at the time which can happen when people single out a stock i mean look at tesla as an example.

another gentailer MCY which is considered the best stock in the group at the moment capital lost from the hig of 5.50 for only 1 year is 7% ( if your held longer than 1 year then your % gain is positive not as snoopy 1 point in time example) on todays prices but if you add in dividends received over the year its more likely 2% down and next year could easliy be back in positive so your statements are misleading. ( only a small % of people brought at the very highs as well)
gentailers the right ones held for income are most likely to provide good or much better returns than term deposits going forward.

[Snoopy]

Snoopy I think his biggest problem is he is lending obviously a % or portion of his total Kiwisaver fund. What if the performance is average or the company for whatever reason gets into trouble and 20 % of his Kiwisaver customers just switch funds which would take them less than 5 minutes to do ... Does he call in the mortgages to balance the fund ?


Recent history would suggest running a low overhead structure and simply putting kiwisaver equity funds with index managers should see above average returns over time. Putting fixed interest money into mortgages rather than bond funds with interest rates at all time lows, I would suggest should be a strategy that will outperform the 'fixed interest market'. If Simplicity gets above market returns, then the chances of mass switching by kiwisaver holders is reduced. However, as we know humans are fickle and can be irrational in times of stress. So even though I think it is unlikely that Stubb's strategy will backfire, that doesn't mean it can't happen.

Stoploss, you pose the question that if there is a sudden withdrawal of fixed interest funds, does Stubbs call in the mortgages? You ask it as though Stubbs has discretion in what he might do. But I would say Stubbs would not have a choice in those circumstances. Perhaps selling the mortgages to another market player like a bank would be his last ditch get out of jail free card?

SNOOPY

[macduffy]

Stoploss, you pose the question that if there is a sudden withdrawal of fixed interest funds, does Stubbs call in the mortgages? You ask it as though Stubbs has discretion in what he might do. But I would say Stubbs would not have a choice in those circumstances. Perhaps selling the mortgages to another market player like a bank would be his last ditch get out of jail free card?

Yes, provided the market for mortgages is sufficiently strong at the time and that the price is "acceptable".

[Snoopy]

You're behind the curve snoopy its all about fomo and momo now fundamentals are out of vogue or irrelevant mostly in this environment of mass money printing.
why your cen example is correct it really ran far ahead of all other gentailers at the time which can happen when people single out a stock i mean look at tesla as an example.


Ah a new market paradigm! 'It is different this time.' Those of us who have been around the market for a while have heard this before, more than once. I can see myself owning a Tesla vehicle in the future, but the chances of me owning Tesla shares? Get back to me when positive cashflow is on the horizon.



another gentailer MCY which is considered the best stock in the group at the moment capital lost from the high of 5.50 for only 1 year is 7% ( if your held longer than 1 year then your % gain is positive not as snoopy 1 point in time example) on today's prices but if you add in dividends received over the year its more likely 2% down and next year could easily be back in positive so your statements are misleading (only a small % of people brought at the very highs as well) gentailers the right ones held for income are most likely to provide good or much better returns than term deposits going forward.


It is the small percentage of shareholders that bought MCY shares at $5.50 I am concerned about. I am not suggesting that buying CEN and MCY is a bad thing overall. Indeed I have a good chunk of my savings in each myself. But the time to buy in was when I did, when the market was scared the Greens would force the gentailers to sell their electricity to the market at historical generation cost, and when Origin in Australia were quitting their CEN stake which depressed the price. Not today. Drought years usually fuel short term fears in the electricity market. That would be my signal to start looking again at MCY and CEN. Falling interest rates are expected and already built into the gentailers prices in my view. The market always looks ahead and will have already priced in future interest rate cuts.

Nothing wrong with having gentailers in your investment portfolio. But not a any price.

SNOOPY

[bull....]

Ah a new market paradigm! 'It is different this time.' Those of us who have been around the market for a while have heard this before, more than once. I can see myself owning a Tesla vehicle in the future, but the chances of me owning Tesla shares? Get back to me when positive cashflow is on the horizon.



It is the small percentage of shareholders that bought MCY shares at $5.50 I am concerned about. I am not suggesting that buying CEN and MCY is a bad thing overall. Indeed I have a good chunk of my savings in each myself. But the time to buy in was when I did, when the market was scared the Greens would force the gentailers to sell their electricity to the market at historical generation cost, and when Origin in Australia were quitting their CEN stake which depressed the price. Not today. Drought years usually fuel short term fears in the electricity market. That would be my signal to start looking again at MCY and CEN. Falling interest rates are expected and already built into the gentailers prices in my view. The market always looks ahead and will have already priced in future interest rate cuts.

Nothing wrong with having gentailers in your investment portfolio. But not a any price.

SNOOPY

using mcy as an example a 3 odd % return is far better than a 1% in term deposits most likely sometime next year. overseas experience from very low rates shows people will pay up for stocks when the return is higher and stable.

[Zaphod]

using mcy as an example a 3 odd % return is far better than a 1% in term deposits most likely sometime next year. overseas experience from very low rates shows people will pay up for stocks when the return is higher and stable.

True, but I would add that we should still exercise a cautious approach to purchasing shares depending where we are currently located in the economic cycle. I'm hearing more people stating they're going to buy in to something, anything, in the stock market, at any price, because interest rates are so low. That's a recipe for disaster, although not what you are advocating of course.

[bull....]

Ready for a 1.5% mortgage rate?The Reserve Bank is preparing to lend fresh money to banks at negative interest rates from early next year, which would allow them to cut mortgage rates as low as 1.5 percent, Bernard Hickey reports

https://www.newsroom.co.nz/ready-for-a-15-mortgage-rate

[Entrep]

If professional players can have their judgement affected in this low interest rate environments, what does that say for the rest of us? Those who rushed to buy Contact Energy at $9 to secure an income stream, could now spend more than a decade trying to bank their income just to get back to the start point where their capital losses are recovered. A great utility can still be overpriced and make a terrible investment because of that. Fear of Missing Out (FOMO) will in general lead to poor investment decisions, as people overpay for what they think is a 'safe income paying investment'. Unforeseen crises will see to it that the thinking investor will not be too late to grab investment opportunities, even if they have to exercise some patience. Earning 1% on a bank term deposit or less might be a bitter pill to swallow. But it beats losing 20% of your capital on an investment that has not been thought through. My message to investors at this time is 'Be patient' and 'Be careful'. With FOMO we may be entering a period of investor foolishness, where experienced investors can sell certain utility investments at overinflated prices to the FOMO crowd. Cashing up on the madness (or putting it in the can investment parlance slang) may prove to be the way to and prevent you becoming a penny constrained old fool.

Great advice



Ready for a 1.5% mortgage rate?The Reserve Bank is preparing to lend fresh money to banks at negative interest rates from early next year, which would allow them to cut mortgage rates as low as 1.5 percent, Bernard Hickey reports

https://www.newsroom.co.nz/ready-for-a-15-mortgage-rate

Cash is pure trash. Time to back the truck up and load up on debt.

[bull....]

Great advice




Cash is pure trash. Time to back the truck up and load up on debt.

even better is lots of debt and safe utility dividends and a safe job

[bull....]

Powell is on the side of the bulls’ — Cramer calls Fed chief’s speech ‘incredible’ for investors


https://www.cnbc.com/2020/08/27/jim-cramer-calls-fed-chief-powells-speech-incredible-for-investors.html


Federal Reserve Chair Jerome Powell unveiled a new approach to setting U.S. monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come

https://www.bloomberg.com/news/articles/2020-08-27/powell-says-fed-to-seek-inflation-that-averages-2-over-time?srnd=premium-asia

[bull....]

US futures roaring higher in after hours

[sb9]

US futures roaring higher in after hours

30k will be taken out soon as salesforce, amgen and honeywell added to the index along with added fuel from FED.

[Hoop]

welcome to the cuckoo's nest

[bull....]

30k will be taken out soon as salesforce, amgen and honeywell added to the index along with added fuel from FED.

more tech like business added and companies like exon removed reflects the changing nature of the world which is a good move.

[bull....]

Dow closes more than 150 points higher to erase its 2020 losses
https://www.cnbc.com/2020/08/27/stock-market-futures-open-to-close-news.html


low rates for ever propelling valuations on future cash flows of companies

[bull....]

RBNZ Says Monetary Policy Approach In Line With New Fed Strategy
https://www.bloomberg.com/news/articles/2020-08-28/rbnz-says-monetary-policy-approach-in-line-with-new-fed-strategy


So the rbnz likes the big policy shift from the fed and sees them possibly following

[bull....]

did you know that MCY and MEL and VCT the leading power companies in stock moves at the moment are potentially if they close around current levels, they will be record mthly closing highs.

with the RBNZ buying over 100 m of bonds per week at the moment some of that money received is obviously flowing into these bond proxies for there stable tax paid dividends and who can blame them 3 - 4 % vrs bonds under 1% less tax.

get your income while it lasts

[moka]

Monetary policy is often discussed and implemented but fiscal policy is not implemented so readily.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12360674
Central bankers grapple with changed landscape at Jackson Hole.
But one key factor that occasionally entered the discussions and is top of mind for many policymakers is the need for fiscal policy to remain aggressive to support monetary policy actions, ensure demand does not collapse, and mitigate any heightened inequality due to the crisis. In the US, in particular, massive initial fiscal support has waned significantly in recent months and is in danger of evaporating completely if a new relief package is not approved.

[bull....]

Shocker’ euro zone data raises questions about what the ECB will do next
https://www.cnbc.com/2020/09/01/what-will-the-ecb-do-as-inflation-shrinks-to-minus0point2percent-in-august.html

looks to me like they will need to do more stimulus to stop deflation

[bull....]

heres the WTF chart of the day adjusted for stock split..... simply stunning returns

https://www.marketwatch.com/story/the-triple-wtf-chart-of-the-year-put-your-brain-on-tesla-autopilot-and-believe-11598979889?mod=home-page

[BlackPeter]

heres the WTF chart of the day adjusted for stock split..... simply stunning returns

https://www.marketwatch.com/story/the-triple-wtf-chart-of-the-year-put-your-brain-on-tesla-autopilot-and-believe-11598979889?mod=home-page

It is only stunning returns if you bought in the past and are selling now ;);

But yes, looks good. You could draw similar charts for many stocks ... amazon, google, microsoft, AltaVista, 3Com, Yahoo!, ATM, Wynyard, Bitcoin, FPH, MFT, ...

Some of them managed so far to grow to ever higher highs ... and others didn't. Some crashed after amazing peaks into the ground and others moved after exciting hype spikes to a quite boring flat line ...

Question is - to which part of this group will Tesla belong in the future? Generally speaking - no company can maintain their market cap for a long time unless they can convince the market that they will over time earn (and return) more money than their market cap is worth today.

This seems to be easier for companies which produce easily scalable products (like software or automated ticket clipping services), though this is no guarantee either (check out Dotcom bubble).

Manufacturing electric cars is not easily scalable (you need a hell of a lot of additional hardware if you want to increase your throughput) ... and Tesla will need to manufacture and sell a huge amount of electric cars to justify their current market cap (US$450B) - just to compare .... Daimlers Market Cap at the moment is Euro 45B .... i.e. roughly 10% of Teslas.

Bubble, bubble ?

[bull....]

wall st having another great day , bit of profit taking in tech and rotation into other sectors today

[sb9]

Dow on the verge of topping 30k on back of more stimulus from FED.

[Entrep]

Blue horseshoe loves Anacott Steel

[bull....]

the vix is rising as the stock market rising ( normally the vix rises and the market falls ) suggesting to me the moves to upside may get larger

[JohnnyTheHorse]

the vix is rising as the stock market rising ( normally the vix rises and the market falls ) suggesting to me the moves to upside may get larger

VIX is rising as people are using it as a hedge for an expected correction (SPY daily RSI sitting at 82.2).

[sb9]

Interesting article with different perspectives to current share market scenario...Lister Vs Hawes

https://www.interest.co.nz/personal-finance/106861/two-investors-two-views-whether-increase-or-decrease-your-exposure-shares

[Corleone]

It is only stunning returns if you bought in the past and are selling now ;);

But yes, looks good. You could draw similar charts for many stocks ... amazon, google, microsoft, AltaVista, 3Com, Yahoo!, ATM, Wynyard, Bitcoin, FPH, MFT, ...

Some of them managed so far to grow to ever higher highs ... and others didn't. Some crashed after amazing peaks into the ground and others moved after exciting hype spikes to a quite boring flat line ...

Question is - to which part of this group will Tesla belong in the future? Generally speaking - no company can maintain their market cap for a long time unless they can convince the market that they will over time earn (and return) more money than their market cap is worth today.

This seems to be easier for companies which produce easily scalable products (like software or automated ticket clipping services), though this is no guarantee either (check out Dotcom bubble).

Manufacturing electric cars is not easily scalable (you need a hell of a lot of additional hardware if you want to increase your throughput) ... and Tesla will need to manufacture and sell a huge amount of electric cars to justify their current market cap (US$450B) - just to compare .... Daimlers Market Cap at the moment is Euro 45B .... i.e. roughly 10% of Teslas.

Bubble, bubble ?

What's unique this time it seems is the millennials buying Tesla are using their share purchases like votes. They have collectively decided Tesla should/will be the future and will pay good money to enable it to happen...."Here's our money Elon, now take over and dominate". The ones I've spoken to see it almost a s a moral duty, returns and EPS etc be damned. The new democracy.

[moka]

What's unique this time it seems is the millennials buying Tesla are using their share purchases like votes. They have collectively decided Tesla should/will be the future and will pay good money to enable it to happen...."Here's our money Elon, now take over and dominate". The ones I've spoken to see it almost a s a moral duty, returns and EPS etc be damned. The new democracy.It is the same in New Zealand with millennials buying AIR & THL, good iconic New Zealand companies, to support them, but as Martin Hawes said in the previous article “shareholders benefit from high share prices, not the company as such.” Buying shares in AIR is not the same as buying airline tickets – it doesn’t create revenue.

[bull....]

this is what ORR say yesterday at speaking ingagement

RBNZ Governor Orr: Actively preparing a package of additional monetary policy tools to use if needed
Key comments

Says have been effective in lowering interest rates across the board.
Says actively preparing a package of additional monetary policy tools to use if needed.
Says options include negative wholesale interest rates, further QE, direct lending to banks, and ongoing forward guidance about our intentions.
Says need banks to use risk models, capital, liquidity headroom to support customers’ best long-term interests.


https://www.fxstreet.com/news/rbnz-governor-orr-actively-preparing-a-package-of-additional-monetary-policy-tools-to-use-if-needed-202009020034

[stoploss]

this is what ORR say yesterday at speaking ingagement

RBNZ Governor Orr: Actively preparing a package of additional monetary policy tools to use if needed


Key comments



Says have been effective in lowering interest rates across the board.
Says actively preparing a package of additional monetary policy tools to use if needed.
Says options include negative wholesale interest rates, further QE, direct lending to banks, and ongoing forward guidance about our intentions.
Says need banks to use risk models, capital, liquidity headroom to support customers’ best long-term interests.


https://www.fxstreet.com/news/rbnz-governor-orr-actively-preparing-a-package-of-additional-monetary-policy-tools-to-use-if-needed-202009020034

If you want it from the source .
https://www.rbnz.govt.nz/research-and-publications/speeches/2020/speech2020-09-02

[bull....]

leading on from what jonny the horse was mentioning we getting a bit of a fall to takes the rsi back under 70 on US markets unsurprising tech is falling the most , energy , financials and utilities doing the best probably that rotation the other day was smart money moving out of tech

[bull....]

Robinhood faces SEC investigation over deals with high-speed traders
that it took payments from high-speed trading firms for sending them customers’ orders to buy or sell stocks or options, the people said. The practice, known as payment for order flow, is a common — if controversial — way for retail brokerages to execute client trades. Critics say payment for order flow creates a conflict of interest for the broker that sells the orders. The practice has raised suspicions that it could lead to sophisticated traders exploiting mom-and-pop investors, although brokers and traders say such concerns are baseless.

https://www.marketwatch.com/story/robinhood-faces-sec-investigation-over-deals-with-high-speed-traders-2020-09-02?mod=home-page

dont some brokers in NZ do this order flow stuff?

[Entrep]

https://media.giphy.com/media/LLZMSQMeudScrJ8ACa/giphy.gif

[Leemsip]

Could get rough out there today. US markets down hard overnight...

Might be time to lighten up some of my non-conviction holdings......

[MarineSalvage]

a sea of red in my USA tech holdings - but others doing OK this morning... assuming we will catch a cold today... might be some interesting buying

[bull....]

a sea of red in my USA tech holdings - but others doing OK this morning... assuming we will catch a cold today... might be some interesting buying

the big tech sell off drags the indexes down just like on the way up. some sub sectors like you say is doing good today

[Entrep]

You ain’t seen nothing yet. Wait until next week

[bull....]

You ain’t seen nothing yet. Wait until next week

whats up next week?

[King1212]

Party bull..... cocktail party after 5pm...heaps of escorts....u have not seen it yet

[bull....]

Party bull..... cocktail party after 5pm...heaps of escorts....u have not seen it yet

sounds like a bank dealers party lol

[BlackPeter]

the big tech sell off drags the indexes down just like on the way up. some sub sectors like you say is doing good today

So - how is the situation "one step ahead of the herd"? Already in free fall or finding another hill to climb?

Did we reach the peak and it is all downhill from here ... or is this just another bull trap?

[Entrep]

whats up next week?

post labour day weekend in us

[bull....]

So - how is the situation "one step ahead of the herd"? Already in free fall or finding another hill to climb?

Did we reach the peak and it is all downhill from here ... or is this just another bull trap?

one day dont make a trend , so im not panicking the sell - off was mainly in big tech

[BlackPeter]

one day dont make a trend , so im not panicking the sell - off was mainly in big tech

Fair enough ... on the other hand, wasn't it mainly big tech driving the recent heights?

[bull....]

Fair enough ... on the other hand, wasn't it mainly big tech driving the recent heights?

yep , so your probably get forced margin selling tonight at the open by the late comers i reckon

[bull....]

now we know what caused the rapid run up in the nasdaq in august it remains to be seen if we get the swoon on the downside this month since the buying has potentially been outed.

Softbank identified as the ‘Nasdaq whale’ that bought billions in stock options, betting on higher prices for the biggest names in tech


https://www.cnbc.com/2020/09/04/softbank-reportedly-the-nasdaq-whale-that-bought-billions-in-options.html


bloomberg saying that it was softbank and retail day traders front running softbank

Small day traders have spent $40 billion in call premiums in a month, data he compiled from the Options Clearing Corp.

https://www.bloomberg.com/news/articles/2020-09-05/huge-swings-in-options-overrun-stocks-leave-fund-manager-baffled?srnd=premium-asia

[Hoop]

I have just finished reading the ASB Quarterly Economic Forecast (https://www.asb.co.nz/documents/economic-research/quarterly-economic-forecasts.html) (released today 7th September)

[peat]

I have just finished reading the ASB Quarterly Economic Forecast (https://www.asb.co.nz/documents/economic-research/quarterly-economic-forecasts.html) (released today 7th September)

and posted about it in the Black Monday thread hahah

actually it says
- economy better than expected , though still taken a hit
- global recovery to be gradual and disrupted.


John Ryders commentary this morning noted

statistical analysis shows that locking down the US economy didn’t contain the disease’s spread and reopening it didn’t unleash a second wave of infections.

thats quite a stunning piece of information in my opinion

[Norwest]

I have just finished reading the ASB Quarterly Economic Forecast (https://www.asb.co.nz/documents/economic-research/quarterly-economic-forecasts.html) (released today 7th September)

These are always a good read, sombre mid-long term forecasts but it's exactly what you would expect.

[Jaa]

and posted about it in the Black Monday thread hahah

actually it says
- economy better than expected , though still taken a hit
- global recovery to be gradual and disrupted.


John Ryders commentary this morning noted

statistical analysis shows that locking down the US economy didn’t contain the disease’s spread and reopening it didn’t unleash a second wave of infections.

thats quite a stunning piece of information in my opinion

What is stunning is that you are taking public health advice from an economist. Hope you don't get your investment advice from your dentist.

[Zaphod]

These are always a good read, sombre mid-long term forecasts but it's exactly what you would expect.

Yes, I think there's a lot of pain to come yet especially once companies begin right-sizing. I do wonder whether all these returning NZers will be able to secure jobs, and if not, what are their plans?

[Baa_Baa]

Yes, I think there's a lot of pain to come yet especially once companies begin right-sizing. I do wonder whether all these returning NZers will be able to secure jobs, and if not, what are their plans?

For sure this is going to play out for a long while yet, and it's not pretty for many though some will profit handsomely. Maybe a change in strategy from working for a living and diligent saving and investing, to selling the family home to some dumb ex-pat online sight unseen for twice or three times what we'd get locally and retire early... that's a lol, by the way. Though time to recalibrate ones thinking about the immediate to medium term future.

[peat]

What is stunning is that you are taking public health advice from an economist. Hope you don't get your investment advice from your dentist.

i tend to rate people not unproven skillsets. For instance an economist can be a useless fool graduate promulgating his corporate views, (eg I didnt bother reading the whole ASB report Hoop linked to), or he can be an intelligent astute individual who has started majorly successful companies and have a good grip on the world around him who shares his views, and in my experience after quite a few years of hearing those views I rate him better than most. Its not public health advice in any case it is commentary on the benefits or otherwise of the public health policy that was implemented.

All I can say watching the TV news is that I've never seen so many epidemiologists!!

My dentist is a councillor and major heritage property owner around the region , so he's doing okay for himself too fyi. We talked Tesla but he's a bricks and mortar man.

[jimdog31]

i tend to rate people not unproven skillsets. For instance an economist can be a useless fool graduate promulgating his corporate views, (eg I didnt bother reading the whole ASB report Hoop linked to), or he can be an intelligent astute individual who has started majorly successful companies and have a good grip on the world around him who shares his views, and in my experience after quite a few years of hearing those views I rate him better than most. Its not public health advice in any case it is commentary on the benefits or otherwise of the public health policy that was implemented.

All I can say watching the TV news is that I've never seen so many epidemiologists!!

My dentist is a councillor and major heritage property owner around the region , so he's doing okay for himself too fyi. We talked Tesla but he's a bricks and mortar man.

And some of them have outrageous hair colours .....

[Jaa]

i tend to rate people not unproven skillsets. For instance an economist can be a useless fool graduate promulgating his corporate views, (eg I didnt bother reading the whole ASB report Hoop linked to), or he can be an intelligent astute individual who has started majorly successful companies and have a good grip on the world around him who shares his views, and in my experience after quite a few years of hearing those views I rate him better than most. Its not public health advice in any case it is commentary on the benefits or otherwise of the public health policy that was implemented.

All I can say watching the TV news is that I've never seen so many epidemiologists!!

My dentist is a councillor and major heritage property owner around the region , so he's doing okay for himself too fyi. We talked Tesla but he's a bricks and mortar man.

Classic dentist chat. He might have called the top of the great Tesla bubble! Do keep us updated :)

Seriously though, both of Mr Ryders statements are factually wrong, lockdowns DID contain COVID's spread (e.g. NY, NZ) and reopening DID cause a second wave (e.g. Florida, Europe). Quick look at the infection stats shows that.

Interestingly lots of reports now (https://www.bloomberg.com/news/articles/2020-07-16/virus-fears-hurt-u-s-economy-whether-locked-down-or-reopened), that locking down doesn't seem to affect the economy. It is people's fear of the virus and thus confidence to go out and spend (or not) which does. So you are better off for public health AND economically to lock down and get things under control. What happened in NZ when we returned to Level 1 shows this very clearly and is NZ's current approach.

Would say it sounds like stage 1 macroeconomics and the marginal propensity to consume (https://www.investopedia.com/terms/m/marginalpropensitytoconsume.asp) and Keynesian multipliers except that I happened to skip that one so maybe it was Econ211 :p

[JSwan]

Classic dentist chat. He might have called the top of the great Tesla bubble! Do keep us updated :)

Seriously though, both of Mr Ryders statements are factually wrong, lockdowns DID contain COVID's spread (e.g. NY, NZ) and reopening DID cause a second wave (e.g. Florida, Europe). Quick look at the infection stats shows that.

Interestingly lots of reports now (https://www.bloomberg.com/news/articles/2020-07-16/virus-fears-hurt-u-s-economy-whether-locked-down-or-reopened), that locking down doesn't seem to affect the economy. It is people's fear of the virus and thus confidence to go out and spend (or not) which does. So you are better off for public health AND economically to lock down and get things under control. What happened in NZ when we returned to Level 1 shows this very clearly and is NZ's current approach.

Would say it sounds like stage 1 macroeconomics and the marginal propensity to consume (https://www.investopedia.com/terms/m/marginalpropensitytoconsume.asp) and Keynesian multipliers except that I happened to skip that one so maybe it was Econ211 :p

Did Gamini Jayasuriya teach you econ 101? Excellent lecturer btw

[Blue Skies]

Classic dentist chat. He might have called the top of the great Tesla bubble! Do keep us updated :)

Seriously though, both of Mr Ryders statements are factually wrong, lockdowns DID contain COVID's spread (e.g. NY, NZ) and reopening DID cause a second wave (e.g. Florida, Europe). Quick look at the infection stats shows that.

Interestingly lots of reports now (https://www.bloomberg.com/news/articles/2020-07-16/virus-fears-hurt-u-s-economy-whether-locked-down-or-reopened), that locking down doesn't seem to affect the economy. It is people's fear of the virus and thus confidence to go out and spend (or not) which does. So you are better off for public health AND economically to lock down and get things under control. What happened in NZ when we returned to Level 1 shows this very clearly and is NZ's current approach.

Would say it sounds like stage 1 macroeconomics and the marginal propensity to consume (https://www.investopedia.com/terms/m/marginalpropensitytoconsume.asp) and Keynesian multipliers except that I happened to skip that one so maybe it was Econ211 :p


That's an enlightening report in Bloomberg & based on survey of 2.25 million businesses based on very solid research.

Wish someone could talk some sense into David Seymour & ACT who want to reopen the border & damm the consequences, what an absolute disaster that would be both for the economy & hundreds of thousands of people with immune supressed health conditions and our elderly population & our health system & all the doctors and nurses and staff who run our hospitals, Rest Homes, etc and their families & close contacts & the people & businesses which rely on them.

[bull....]

That's an enlightening report in Bloomberg & based on survey of 2.25 million businesses based on very solid research.

Wish someone could talk some sense into David Seymour & ACT who want to reopen the border & damm the consequences, what an absolute disaster that would be both for the economy & hundreds of thousands of people with immune supressed health conditions and our elderly population & our health system & all the doctors and nurses and staff who run our hospitals, Rest Homes, etc and their families & close contacts & the people & businesses which rely on them.

well if the economy going down the toilet this new industry will help

Research shows legal cannabis could earn Government nearly $1 billion

https://www.stuff.co.nz/national/politics/122705909/election-2020-research-shows-legal-cannabis-could-earn-government-nearly-1-billion

[King1212]

U n me can get high together bull.....

[Jerry]

That's an enlightening report in Bloomberg & based on survey of 2.25 million businesses based on very solid research.

Wish someone could talk some sense into David Seymour & ACT who want to reopen the border & damm the consequences, what an absolute disaster that would be both for the economy & hundreds of thousands of people with immune supressed health conditions and our elderly population & our health system & all the doctors and nurses and staff who run our hospitals, Rest Homes, etc and their families & close contacts & the people & businesses which rely on them.

Too right! Catching COVID isn't a matter of a week or two and one is cured. It entails months of illness, and health costs long term. Those who want to open up and devil take the population, don't have an economic argument that makes sense.

[blackcap]

Too right! Catching COVID isn't a matter of a week or two and one is cured. It entails months of illness, and health costs long term. Those who want to open up and devil take the population, don't have an economic argument that makes sense.

Yeah nah. Just been watching the US Open where a few of the athletes have had covid. They are still performing at their peak even though they had covid not more than 2 - 3 months ago.

[dobby41]

Too right! Catching COVID isn't a matter of a week or two and one is cured. It entails months of illness, and health costs long term. Those who want to open up and devil take the population, don't have an economic argument that makes sense.


Yeah nah. Just been watching the US Open where a few of the athletes have had covid. They are still performing at their peak even though they had covid not more than 2 - 3 months ago.

You are both generalising - some get it and hardly notice during or after.
Some get it and the impacts carry on for months.
Some die!

[blackcap]

You are both generalising - some get it and hardly notice during or after.
Some get it and the impacts carry on for months.
Some die!

Most, nearly all, get it and hardly notice during or after,
Some get it and impacts carry on,
A very few die.

There fixed it for you.

[BlackPeter]

Most, nearly all, get it and hardly notice during or after,
Some get it and impacts carry on,
A very few die.

There fixed it for you.

Quite wrong.

Sure - there is a significant number of asymptomatic cases, and they seem to be quite fine (other then infecting others).

However - most people who do get the symptoms describe it more like "being hit by a bus". Think a pretty bad flu ... and if you just check that the average time to suffer from this virus is around 28 days - this is clearly worse than the flu. Ask your big hero Boris ... I hear he had a near death experience.

Some people (including healthy athletes) do suffer for months under weakness / heart conditions and continue to do so. Whether they will fully recover - nobody knows (due to the short time the virus is so far around):
https://medicalxpress.com/news/2020-07-tail-coronavirus-prolong-months.html

A significant percentage of the patients who had been hospitalised suffer under heart damage (well above 10% according to several studies - check link below), blood clots (including stroke), lung damage, neurological symptoms:

https://www.advisory.com/daily-briefing/2020/06/02/covid-health-effects


And a not insignificant number of people in risk groups are dying (from memory still around 10% in the group above 80). Risk groups are people of old age (70+), people with diabetes, people with immune deficiencies, people with heart conditions and similar (https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-with-medical-conditions.html). Roughly one third of the population.

Listening to your posts (the few I still read) you sound like somebody who does not care for other people - and you probably don't have friends either, i.e. nobody you care for would be at risk. However, just wondering - we all grow older and for you (male, white, privileged and around the 60íes) is it another 10 years or so until you end up to be in the high risk group.

I take it that you would not mind if society would at that stage risk your health and life? Or is it just the health of other people you don't care about?

[bull....]

Labour to bring back top 39 per cent income tax rate

https://www.stuff.co.nz/national/politics/300102796/election-2020-labour-to-bring-back-top-39-per-cent-income-tax-rate

[Blue Skies]

Most, nearly all, get it and hardly notice during or after,
Some get it and impacts carry on,
A very few die.

There fixed it for you.


With respect, unfortunately you're back to a myopic viewpoint on a very big topic.
If you're really interested & really want to get informed, suggest you study the repeated economic & health impacts of pandemics throughout history, from cholera in Naples, to Yellow Fever in the US, to Covid 19.
Believe it or not, a case built on a few young athletes in peak physical condition at the US Open doesn't really cut it & tbh sounds like a joke.
Putting aside the very obvious crushing overloading of health systems, hospitals, infections of doctors & nurses etc, the fear of these pandemics throughout history, drastically changes the behaviour of populations with severe economic consequences.
The research quoted in Bloomberg was based on 2.25 million businesses, illustrating how the fear of catching the virus has the greatest impact on businesses, even greater than Govt imposed Lockdowns, with any increase in the death rate correlating with a pattern of a downturn in commerce with people generally being more careful about spending & holding onto their money, avoiding businesses avoiding eating out, avoiding flying, cruises etc.
Pandemics thrive in densely populated areas which are also commercial centres.
Fear is a huge driver of human behaviour.

[blackcap]

Quite wrong.

Sure - there is a significant number of asymptomatic cases, and they seem to be quite fine (other then infecting others).

However - most people who do get the symptoms describe it more like "being hit by a bus". Think a pretty bad flu ... and if you just check that the average time to suffer from this virus is around 28 days - this is clearly worse than the flu. Ask your big hero Boris ... I hear he had a near death experience.

Some people (including healthy athletes) do suffer for months under weakness / heart conditions and continue to do so. Whether they will fully recover - nobody knows (due to the short time the virus is so far around):
https://medicalxpress.com/news/2020-07-tail-coronavirus-prolong-months.html

A significant percentage of the patients who had been hospitalised suffer under heart damage (well above 10% according to several studies - check link below), blood clots (including stroke), lung damage, neurological symptoms:

https://www.advisory.com/daily-briefing/2020/06/02/covid-health-effects


And a not insignificant number of people in risk groups are dying (from memory still around 10% in the group above 80). Risk groups are people of old age (70+), people with diabetes, people with immune deficiencies, people with heart conditions and similar (https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-with-medical-conditions.html). Roughly one third of the population.

Listening to your posts (the few I still read) you sound like somebody who does not care for other people - and you probably don't have friends either, i.e. nobody you care for would be at risk. However, just wondering - we all grow older and for you (male, white, privileged and around the 60íes) is it another 10 years or so until you end up to be in the high risk group.

I take it that you would not mind if society would at that stage risk your health and life? Or is it just the health of other people you don't care about?

Like you said, most people are asymptomatic. So like I said, Most do not have any affects etc. Thats all.

I do care a lot about others. But caring is not being myopic and looking at one factor. I care a lot about those that have lost businesses, those that cannot travel to visit family that need them, friends of mine that have been diagnosed with cancer but its too late because of covid restrictions etc etc. I could go on ad nauseum. If people are going to use faulty science and bad maths to create a dystopian society then well that's their choice. I just choose not to participate in that nonsense. You are way off with age, colour and other identity issues that are well, boring and irrelevant.

[bull....]

NZ 10 yr bond is crashing down 12% at the moment 2 yr right on zero ... something big must be happening

[BlackPeter]

Like you said, most people are asymptomatic. So like I said, Most do not have any affects etc. Thats all.

I do care a lot about others. But caring is not being myopic and looking at one factor. I care a lot about those that have lost businesses, those that cannot travel to visit family that need them, friends of mine that have been diagnosed with cancer but its too late because of covid restrictions etc etc. I could go on ad nauseum. If people are going to use faulty science and bad maths to create a dystopian society then well that's their choice. I just choose not to participate in that nonsense. You are way off with age, colour and other identity issues that are well, boring and irrelevant.

As Blue Skies stated above ... there is plenty of research showing that in previous pandemics the economic damage was always significantly worse in countries / areas where people allowed the virus (or earlier the bug - bubonic plague) to spread. Just check out some literature about the Spanish flu, about cholera epidemics or about the plague ...

If you really care about people than you should not undermine sensible protection against this virus (as you do) ... and you clearly should not minimise the risks (as you do).

[Hoop]

Labour to bring back top 39 per cent income tax rate

https://www.stuff.co.nz/national/politics/300102796/election-2020-labour-to-bring-back-top-39-per-cent-income-tax-rate
Re Covid-19 Labour's recovery policy
Jacinda "..we the team of 5 million can do this if we all play our part......"
Grant "....we the team of 50,000 can do this if we all pay our part......"

Ref...People earning wages and salaries in New Zealand By taxable income band, year ended March 2019, number of people (https://figure.nz/chart/UnE8CtjDJuqPUk9U)

[ratkin]

As Blue Skies stated above ... there is plenty of research showing that in previous pandemics the economic damage was always significantly worse in countries / areas where people allowed the virus (or earlier the bug - bubonic plague) to spread. Just check out some literature about the Spanish flu, about cholera epidemics or about the plague ...

If you really care about people than you should not undermine sensible protection against this virus (as you do) ... and you clearly should not minimise the risks (as you do).

Cholera and the bubonic plague are hardly on a par with covid, which kills about 0.001 percent of healthy people under the age of 60

[peat]

NZ 10 yr bond is crashing down 12% at the moment 2 yr right on zero ... something big must be happening

I cant see anything to support this comment myself. But if so... RBNZ is starting LSAP? or maybe there is a rate set today for one of these upcoming corporate bonds.

[bull....]

I cant see anything to support this comment myself. But if so... RBNZ is starting LSAP? or maybe there is a rate set today for one of these upcoming corporate bonds.

https://www.investing.com/rates-bonds/new-zealand-10-years-bond-yield

probably the LSAP like you say 750 million a week they are buying supposedly so driving the rates lower like they want

[stoploss]

I cant see anything to support this comment myself. But if so... RBNZ is starting LSAP? or maybe there is a rate set today for one of these upcoming corporate bonds.
By my understanding 2023 Govt bond yield traded to -0.025 - First negative yield (excluding inflation linked bonds)

[Panda-NZ-]

What are the prospects for the currency? It's come down 1c recently.

Maybe we should contribute to the gloom for a bit to improve returns for non currency hedged investors and exporters

[bull....]

As New Zealand’s central bank prepares plans for taking interest rates negative to support its recession-hit economy, Sweden’s experience is emerging as the most relevant guide.

https://www.bloomberg.com/news/articles/2020-09-08/new-zealand-eyes-sweden-as-roadmap-for-negative-interest-rates


New Zealand Sees First Negative Bond Yield as Rate-Cut Bets Rise
https://www.bloomberg.com/news/articles/2020-09-09/new-zealand-s-three-year-bond-yield-is-on-the-cusp-of-negative

[bull....]

The one year wholesale swap rate is down 2 basis points to just 0.09% pa. That is $9 of annual interest for $10,000.

https://www.interest.co.nz/news/106973/wholesale-money-markets-mark-down-two-and-three-year-swap-rates-virtually-zero-taking

RBNZ driving rates to negative so next year term deposits should be under 1% i reckon less inflation and taxes means a negative return.

stocks look attractive still as long as they dont crash eh and if your young with a secure job gee whizz best time in history to go berzerk on the debt

[BlackPeter]

stocks look attractive still as long as they dont crash eh and if your young with a secure job gee whizz best time in history to go berzerk on the debt

... well, yes - but only if you can guarantee that the interest rates stay low for a longer time then you need to repay your debts. And this is the problem, nobody can give you this guarantee.

Leverage is always a risk - take on more than good for you and the next economic ripple will wipe you out.

We will see many wipe outs over the next handful of years ... I'd recommend people avoid to become part of the cull.

[blackcap]

... well, yes - but only if you can guarantee that the interest rates stay low for a longer time then you need to repay your debts. And this is the problem, nobody can give you this guarantee.

Leverage is always a risk - take on more than good for you and the next economic ripple will wipe you out.

We will see many wipe outs over the next handful of years ... I'd recommend people avoid to become part of the cull.

Exactly BP. Many companies found that although debt may be cheap it needs to be repaid. And if you cannot then you are in big trouble. SKT and others were about to breach covenants.

And then there is the if interest rates start rising again. As one day they will. They it will wipe out many people.

[Biscuit]

.......And then there is the if interest rates start rising again. As one day they will. They it will wipe out many people.

Yes, agree, there will be nowhere to hide when interest rates start to rise, will be a negative effect on property prices, shares, bonds ....

[bull....]

Yes, agree, there will be nowhere to hide when interest rates start to rise, will be a negative effect on property prices, shares, bonds ....

but thats the catch 22. they can never let interest rates rise to much now. be the great depression x 100

[BlackPeter]

but thats the catch 22. they can never let interest rates rise to much now. be the great depression x 100

I think you should reformulate. Instead of saying "they can never let rise interest rates" you should say "they never will want to let rise interest rates".

Sure - as long as inflation is not an issue, they won't raise interest rates, but this won't be forever. As soon as people sniff out just a brise of inflation (i.e. things getting dearer), they won't lend out their money anymore for low interest rates .... and that's when either the reserve banks of the world either can print still more money (and make things worse) or they have to rise the interest rates (and make things worse).

And yes, I agree - this will turn into a very ugly picture ... but I am sure it will happen. Maybe not this year or next, but it won't be decades away either.

[Biscuit]

.....And yes, I agree - this will turn into a very ugly picture ... but I am sure it will happen. Maybe not this year or next, but it won't be decades away either.


So then, we should all just be buying gold now? Why are we buying shares?

[BlackPeter]

So then, we should all just be buying gold now? Why are we buying shares?

Your words, not mine.

From a personal perspective - I try to hold onto (and increase my holding of) shares of companies producing real and useful stuff people will always need (food, energy, ...). Given that nobody knows where the mortar will explode I think that diversification (shares, property, cash, and yes, some gold as well) is sensible.

As well, given that the bang might well be still years away - why would anybody want to miss out the share price inflation rising up to the peak?

Anyway - DYOR. Listen with an open mind and avoid to put your words into other peoples posts ;).

[Biscuit]

Your words, not mine. .....Anyway - DYOR. Listen with an open mind and avoid to put your words into other peoples posts ;).

No offense intended BP, not sure which of my words you think I put in your post?

[BlackPeter]

No offense intended BP, not sure which of my words you think I put in your post?

Well, you asked "So then, we should all just be buying gold now?" and "Why are we buying shares?" as response to my post.

It sort of felt you think I was encouraging the first and disencouraging the second activity, which I didn't.

... but anyway, never mind and no harm done.

[Biscuit]

Well, you asked "So then, we should all just be buying gold now?" and "Why are we buying shares?" as response to my post.

It sort of felt you think I was encouraging the first and disencouraging the second activity, which I didn't.

... but anyway, never mind and no harm done.

You read too much into what I said. I asked the question as my own hypothetical pondering following on logically from my comments, your comments, blackcap's comments and Bull's comments. I can assure you I am not trying to get at you or criticise your comments.

[bull....]

Again, this happened last time we had a 39c top tax rate. Remember that house price boom in the 2000s? Westpac research (https://businessdesk.co.nz/article/finance/raising-top-income-tax-rates-will-push-up-house-prices-westpac?fbclid=IwAR3UcggGfVctXB0daLVVghlBwh6zJ0Xw1 0TqpYKnC0un9DkkOiN1MBh8JdI) suggests house prices rose 17 per cent simply due to that 39c top tax rate. That will happen again

https://www.stuff.co.nz/national/politics/opinion/122723279/election-2020-wholl-gain-from-labours-plan-to-tax-the-rich-the-rich

[Stranger_Danger]

So then, we should all just be buying gold now? Why are we buying shares?

Yes, you should be buying gold and profitable debt free gold miners and, maybe, if you have the specialist analytical skills required, selected juniors/explorers.

Gold is a difficult sector longer term, very volatile, and any investment into it should be considered higher risk.

However, with the setup we currently have, anybody that has a zero allocation to gold is out of their mind.

I'm not suggesting going "all in", especially at these elevated prices (a further pullback, short term, is very possible). But 5-15% makes a lot of sense, towards the higher end if younger with more risk tolerance.

If one doesn't want to sell equities to invest in the gold sector, don't. Fund it by reducing your bond allocation - because that asset class is where the real irrationality lives.

[ynot]

- because that asset class is where the real irrationality lives.[/QUOTE]

I think you are right there. Currently some NZ real-estate is selling at crazy prices. I'm sure this will correct.

[Blue Skies]

Unemployment looks the most imminent threat to asset prices to me.
It's all very well if you have a secure well paying job, but if companies are struggling & everyone around you is struggling on a reduced income or losing their job and can't pay the mortgage or rent, surely thats going to flow on to asset prices. I know in the UK there's a lot of worried people on furlough from work, feeling extremely insecure about their future when Govt support runs out. Same could happen here.

[ynot]

Unemployment looks the most imminent threat to asset prices to me.
It's all very well if you have a secure well paying job, but if companies are struggling & everyone around you is struggling on a reduced income or losing their job and can't pay the mortgage or rent, surely thats going to flow on to asset prices. I know in the UK there's a lot of worried people on furlough from work, feeling extremely insecure about their future when Govt support runs out. Same could happen here.

WILL happen here.

[JBmurc]

Unemployment looks the most imminent threat to asset prices to me.
It's all very well if you have a secure well paying job, but if companies are struggling & everyone around you is struggling on a reduced income or losing their job and can't pay the mortgage or rent, surely thats going to flow on to asset prices. I know in the UK there's a lot of worried people on furlough from work, feeling extremely insecure about their future when Govt support runs out. Same could happen here.

Yes it seems NZ property is in a perfect storm of upside dirt cheap money with talk of sub 2% fixed term rates next year , limited numbers of property as speculation(new builds) hasn't keeped up with demand that isn't cooling.. and really the hunt for investment ... where else can it go .. NZX getting hacked and limited sectors to invest.. banks offering ever lower deposit rates.

Now if I'm right and 2020 is the start of the next great resources bull market to feed the likes of EV's -tech demand etc , Copper + other base metals = infrastructure spend--Gold Silver- hard currency Central Banks ongoing buying ---financial re-set worries etc

,,, just maybe more Australia's + international investors will continue to forward funds into these sectors (ASX one of the best markets to do it!!).. maybe this ongoing bull market along with sky-high property prices + easy credit will finally open the can of major Inflation ??? the FED states it's happy to let inflation run ... will we be the same and keep rates low while prices of goods+ assets continue to Bubble higher ?? ..

IMHO as soon as inflation needs to be contained increasing rates will be the only tool left ...but this time it won't contain but pop the bubble ...

[BlackPeter]

- because that asset class is where the real irrationality lives.

I think you are right there. Currently some NZ real-estate is selling at crazy prices. I'm sure this will correct.

Not quite so sure about your correction forecast. Real Estate market is a simple formula with high demand and low supply. Last time I checked they didn't make any more land, but the returnees are just piling up at our borders. I think in the last 12 months it was an addition of more than 70k (mainly) returning Kiwis increasing the NZ population. That's nearly 30k more houses required (given our average house occupation rate) we need. The government promised 10k per year but delivered only a few hundred. Not quite enough, if you see what I mean.

As long as we need a house, lots of ugly boarded fences for privacy and a eight to tenth of an acre for every 2.4 additional people, the upwards spiral for real estate prices will continue. Still another 1 million Kiwis abroad who might want to return (many do) - and then there is a basically unlimited pool of Australians who may and might come as well.

[JBmurc]

Not quite so sure about your correction forecast. Real Estate market is a simple formula with high demand and low supply. Last time I checked they didn't make any more land, but the returnees are just piling up at our borders. I think in the last 12 months it was an addition of more than 70k (mainly) returning Kiwis increasing the NZ population. That's nearly 30k more houses required (given our average house occupation rate) we need. The government promised 10k per year but delivered only a few hundred. Not quite enough, if you see what I mean.

As long as we need a house, lots of ugly boarded fences for privacy and a eight to tenth of an acre for every 2.4 additional people, the upwards spiral for real estate prices will continue. Still another 1 million Kiwis abroad who might want to return (many do) - and then there is a basically unlimited pool of Australians who may and might come as well.

Don't forget many other nations that see little old NZ as a great retirement spot or place to run their business from >>>

Going of R.E NZ -25736 res listings for sale sections,houses,units etc (many double listed) - rentals 25736

So yeah we are well short of property ... I'm sure if we opened are borders to US-Europe will could have those filled within short timeframe ...world is awash in FEAR

[ynot]

Not quite so sure about your correction forecast. Real Estate market is a simple formula with high demand and low supply. Last time I checked they didn't make any more land, but the returnees are just piling up at our borders. I think in the last 12 months it was an addition of more than 70k (mainly) returning Kiwis increasing the NZ population. That's nearly 30k more houses required (given our average house occupation rate) we need. The government promised 10k per year but delivered only a few hundred. Not quite enough, if you see what I mean.

As long as we need a house, lots of ugly boarded fences for privacy and a eight to tenth of an acre for every 2.4 additional people, the upwards spiral for real estate prices will continue. Still another 1 million Kiwis abroad who might want to return (many do) - and then there is a basically unlimited pool of Australians who may and might come as well.

I hear what you are saying, and real-estate is the only investment game in town when it comes to nz.
We know some kiwis are returning from overseas but overall immigration numbers are well down since Covid. Govt publish these figures, they are well down this year. Overall numbers are negative every month since April. Remember our boarders are closed to all except returning kiwis.
Then we need to factor in rising unemployment next year, this will apply mortgage stress to those effected. Middle of next year should tell us where housing market is headed.

https://www.customs.govt.nz/covid-19/more-information/passenger-statistics/

[Joshuatree]

Int thanks.Far more leaving than arriving in that timeframe.

https://www.customs.govt.nz/covid-19...er-statistics/ (https://www.customs.govt.nz/covid-19/more-information/passenger-statistics/)

[bull....]

final fed meeting this week before the US election so this will add to a interesting week shaping up from a technical standpoint also. watching 3330 on the s&p500 and the quarterly bars

[Biscuit]

Int thanks.Far more leaving than arriving in that timeframe.

https://www.customs.govt.nz/covid-19...er-statistics/ (https://www.customs.govt.nz/covid-19/more-information/passenger-statistics/)


Passenger stats probably don't tell you much about immigration/emigration?

[BlackPeter]

Int thanks.Far more leaving than arriving in that timeframe.

https://www.customs.govt.nz/covid-19...er-statistics/ (https://www.customs.govt.nz/covid-19/more-information/passenger-statistics/)

Interesting - isn't it? However not consistent with the data from Immigration New Zealand (admittedly, not exactly the same timeframe - the data below are 1 July 2019 to 30 June 2020):



Annual
Year ended June 2020 (compared with year ended June 2019) provisional estimates were:

migrant arrivals – 153,900 (± 1,500), up 8.7 percent
migrant departures – 74,500 (± 600), down 16.6 percent
annual net migration gain – 79,400 (± 1,600), up from 52,300 (± 200).
For migrant arrivals in the June 2020 year, New Zealand citizens were the largest group with 45,500 (± 700) arrivals.

from: https://www.stats.govt.nz/information-releases/international-migration-june-2020

Not quite sure i can explain the difference ... but an immigration gain of nearly 80,000 according to stats NZ does not seem to fit with a loss as your customs numbers seem to imply.

[BlackPeter]

Interesting - isn't it? However not consistent with the data from Immigration New Zealand (admittedly, not exactly the same timeframe - the data below are 1 July 2019 to 30 June 2020):



from: https://www.stats.govt.nz/information-releases/international-migration-june-2020

Not quite sure i can explain the difference ... but an immigration gain of nearly 80,000 according to stats NZ does not seem to fit with a loss as your customs numbers seem to imply.

On a second thought ....

Customs numbers obviously include lots of leaving tourists and short term stayers, while immigration numbers only count (I suppose) residents and long term stayers.

This might be an explanation for the difference. Now - who is going to push the house prices up? It is not the tourists, isn't it?

[NeverQuestion]

On a second thought ....

Customs numbers obviously include lots of leaving tourists and short term stayers, while immigration numbers only count (I suppose) residents and long term stayers.

This might be an explanation for the difference. Now - who is going to push the house prices up? It is not the tourists, isn't it?

That's easy! First Home Buyers with another Government backed Free cash scheme that looks great! But does nothing to help housing affordability because everyone ups the price by the same amount because they know the buyer is "Good for it"

Reserve Bank has already dropped the LVRs so that have done their bit already!

[petty]

Hi BP,

At a quick glance significant proportion of the 80,000 net gain is due to gains made pre March 2020. Keep in mind 80,000 net gain was for the year to June '20 so includes a chunk or pre-covid net inflows that contribute the most. The months July 19 to Feb 20 have a roughly monthly gain of between 6-10,000 people. However if you take April May and June combined the net gain is only 1590 across those three months. Average of 530 a month gain. If we say the rest of the year to June 2021 follows a similar pattern we will have a net gain of 6360 for the year end compared with 80000 the year just been. Drastic if you ask me but maybe Ive been working all day and have missed something (likely).

[ynot]

Passenger stats probably don't tell you much about immigration/emigration?

Actually you are correct. Average 400 per day arrivals are returning kiwis. 600 departing a day are probably visa holders etc.

[Crypto Crude]

That's easy! First Home Buyers with another Government backed Free cash scheme that looks great!

???.......

[BlackPeter]

Hi BP,

At a quick glance significant proportion of the 80,000 net gain is due to gains made pre March 2020. Keep in mind 80,000 net gain was for the year to June '20 so includes a chunk or pre-covid net inflows that contribute the most. The months July 19 to Feb 20 have a roughly monthly gain of between 6-10,000 people. However if you take April May and June combined the net gain is only 1590 across those three months. Average of 530 a month gain. If we say the rest of the year to June 2021 follows a similar pattern we will have a net gain of 6360 for the year end compared with 80000 the year just been. Drastic if you ask me but maybe Ive been working all day and have missed something (likely).

I guess just lets lean back, wait and see.

You are right that the net migration gain in Q2 2020 was rather small (compared to the full year), but this came with extreme border restrictions and the international carrier network basically having been shutdown. On top of that we had full lockdown for 6 weeks and we still had a lot of people desperately trying to get as well to leave the country and get to wherever their home is. I don't think (and hope) that Q2 2020 will be a particular suitable data point to extrapolate migration gains to the next full year.

I do give you that the lions share of the 80k migration gain (Q3 2019 to Q2 2020) is pre-Covid ... i.e. we don't really know based only on these data what the future will bring.

I still think that the pressure for overseas Kiwis to return home to our safe shores will be for some time much stronger than the desire of Kiwis living here to see the scary world out there in person. This is not just related to Covid, but as well to the ugly face of right wing politics which is raising its head not just in the US and in Europe, but in many places overseas. Let's not forget - it is not just the US which is implementing a "us first" policy - which automatically puts anybody who is foreign / different second. Well, Kiwis are foreign everywhere in the world but here, i.e. they will (as well as other foreigners) feel the pressure to leave wherever they live.

As long as NZ is a rather safe place to live I would expect the immigration pressure from returning Kiwis to increase for some time to come. We better have some places for them to live when they arrive at our shores.

[Bjauck]

...
As long as we need a house, lots of ugly boarded fences for privacy and a eight to tenth of an acre for every 2.4 additional people, the upwards spiral for real estate prices will continue. Still another 1 million Kiwis abroad who might want to return (many do) - and then there is a basically unlimited pool of Australians who may and might come as well.
Fences are not only needed for privacy but as part of security measures. While NZ is a safer haven in the epidemic, we do have a threat from theft and burglary. It seems to be a growing problem too. However on international comparisons with all things considered I agree that NZ will continue to appeal to both returning Kiwis and International immigrants.

https://www.stuff.co.nz/national/crime/122414935/auckland-christchurch-and-hamilton-the-countrys-burglary-hotspots-research-finds

[BlackPeter]

Fences are not only needed for privacy but as part of security measures. While NZ is a safer haven in the epidemic, we do have a threat from theft and burglary. It seems to be a growing problem too. However on international comparisons with all things considered I agree that NZ will continue to appeal to both returning Kiwis and International immigrants.

https://www.stuff.co.nz/national/crime/122414935/auckland-christchurch-and-hamilton-the-countrys-burglary-hotspots-research-finds

Not really the right thread, but no - the only thing these ugly 6 ft high board fences popping up in many new subdivisions do is protect the burglars. Much easier for them to break into a house if their activity is concealed by a boarded fence.

[Bjauck]

Not really the right thread, but no - the only thing these ugly 6 ft high board fences popping up in many new subdivisions do is protect the burglars. Much easier for them to break into a house if their activity is concealed by a boarded fence. A bit of a tangent but increased crime could be a consequence of the covid recession.

Having recently had a theft during daylight hours with three people on the property, we have been reviewing security. We had been able to leave doors unlocked when at home. Part of the problem may be that our semi-rural area is affected by recent Auckland urban sprawl - with more traffic and cars parked on the road now.

It does depend on type of fence. if it can stop and slow the opportunist thief, then it helps. If it just provides cover for the crooks as they rob the property, then it is no good. Fencing plus wireless security cameras tied to a phone app is a good combination for those times when the burglar alarm is not activated.

In a dense subdivision if crooks need to climb over fences it could slow them down with a chance to be spotted by neighbours. Cheap fencing probably would not do the trick.

https://www.acsgarden.com/articles/other-gardening/burglar-proofing-the-home-and-garden.aspx

[JBmurc]

Not really the right thread, but no - the only thing these ugly 6 ft high board fences popping up in many new subdivisions do is protect the burglars. Much easier for them to break into a house if their activity is concealed by a boarded fence.

yeah till they meet my Ridgeback

[Bjauck]

yeah till they meet my RidgebackNeighbours have a couple of wee yappy terriers (aka Rdigeback snacks!) that alert us to strange people on that side of the section. The neighbours always take their doggies out with them though.

[bull....]

last fed meeting before US election and the fed has stated that rates will stay low

Fed Signals Rates Will Stay Near Zero for at Least Three Years


https://www.bloomberg.com/news/articles/2020-09-16/fed-signals-rates-will-stay-near-zero-for-at-least-three-years


of course thats within there horizon and could easliy be extended .... get your income why you can if you believe rates can never rise meaningfully ever again

[Hoop]

Note: Navigating the links within this post will be time consuming

With the FED meeting..the NZ Treasury report already out and the soon to be released NZ GDP numbers,this maybe the time to revisit the Yale University's 4 R's model.

A fewf months ago I mentioned the 4 R's a lot in my posts, but it seemed back then to have conflicted with the media's position..Media and the market expectations were ahead of the ball game...and you don't fight against the market..
In saying the above the 4 R's is still a brilliant way to figure out what the Reserve Bank/FED and the Governments are going to do next, and so we can take that crystal ball and make decisions about what to expect in the near future...By now nearly everyone will have observed that most of the Countries in the World are applying very similar Monetary and Fiscal methods..All these methods are contained in Yale's 4R's model...In other words everyone is singing the same song sheet...this makes it easier to "accurately" assume what the Government and Central Banks are going to do next.

The 4 R's Model are Run...Repair.....Recession.....Recovery...(This link article is 4 months old but it has updated links) (https://som.yale.edu/news/2020/05/ypfs-describes-four-phase-model-of-the-economic-consequences-of-pandemic)
Contrary to Media and Markets...we are not in economic recovery stage yet!!!....We are in the Recession stage of the 4 R's model..If you want to accurately look forward in your decision-making you have to remind yourself of that.

Each stage of the 4 R's model has the recommended Fiscal and Monetary actions to help combat a "crisis/aftermath" event...

While the recovery stage is next..These latest reports out this week has a theme..not as bad as previously predicted and this recession could last longer than previously thought...

The conflict:..The media and public think we are in recovery based mainly on the v shaped bounce of the Equity markets and businesses reopening after lock down...This is not a change of stage (recovery) but a monetary manipulated and then sentiment fueled positive reaction designed by the repair stage actions ... lowering interest rates flooding the economy with money, rent and eviction freezes, Government support..etc (see more on the Yale University link above)..

Recovery Stage:...We are not there yet but looking ahead, what will be the Government and Central Banks actions in this stage? ..Too many to list here on this post but here is one to wet your appetite..Bank resources strain (Government to advise/action the halt of Bank dividends to shareholders ...may need money injection into the banking system..etc)..This was telegraphed by Sir John Key's looking forward statement a few months ago...See the links to view the other recommended actions and results of earlier stage actions to date.

Other links with included links:
Covid 19 Crisis ..Fiscal Response trackers

(https://som.yale.edu/faculty-research-centers/centers-initiatives/program-on-financial-stability/covid-19-crisis)Policy Responses to the Coronavirus Epidemic (https://ourworldindata.org/policy-responses-covid)

[bull....]

US futures having a bit of a spaz at the moment , dont they like low rates for ever?

[JSwan]

US futures having a bit of a spaz at the moment , dont they like low rates for ever?

They don't like the Fed's tone about recovery being slow

[Hoop]

US futures having a bit of a spaz at the moment , dont they like low rates for ever?

They don't like the Fed's tone about recovery being slow
Actually the wordings in the FED's press release (https://www.federalreserve.gov/monetarypolicy/files/monetary20200916a1.pdf) is a little negative to the Equities Market..In Stock Market Theory Inflation is the primary driver so wording such as "...the Committee will aim to achieve inflation moderately above 2 percent for some time..." will negatively affect the Market fundamentals.

Interest rates has been a main stock market driver since 1980 (when Monetary Policy became dominant and the used interest rates as a tool to control inflation)..The wording with reference to interest rates staying at 0.00 to 0.25% for some time and suggesting it won't increase with a rising inflation rate, takes away the fundamental advantage for Stock prices to increase, as the competitive yield rates ceases to be a compelling factor for buyers to keep actively purchasing shares. (decreasing the upward pressure on the PE Ratio). ".... The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time...."
This is interesting as the FED is willing (for the time being) to put their interest rate tool back in the Monetary Policy toolbox..This may cause a looser correlation between inflation rate and Interest rates..If it does this will expose the common investor belief that interest rates is a primary driver..Before Monetary Policy (pre 1980) interest rates relationship with the Stock market was often the opposite to what it is today... often (not always) back then when the interest rates declined so did the Stock market...With the interest rate tool back in the toolbox are we going to see that pre 1980's type scenario again when the near future very low interest rates significantly fails to drive the market higher???

[bull....]

Actually the wordings in the FED's press release (https://www.federalreserve.gov/monetarypolicy/files/monetary20200916a1.pdf) is a little negative to the Equities Market..In Stock Market Theory Inflation is the primary driver so wording such as "...the Committee will aim to achieve inflation moderately above 2 percent for some time..." will negatively affect the Market fundamentals.

Interest rates has been a main stock market driver since 1980 (when Monetary Policy became dominant and the used interest rates as a tool to control inflation)..The wording with reference to interest rates staying at 0.00 to 0.25% for some time and suggesting it won't increase with a rising inflation rate, takes away the fundamental advantage for Stock prices to increase, as the competitive yield rates ceases to be a compelling factor for buyers to keep actively purchasing shares. (decreasing the upward pressure on the PE Ratio). ".... The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time...."
This is interesting as the FED is willing (for the time being) to put their interest rate tool back in the Monetary Policy toolbox..This may cause a looser correlation between inflation rate and Interest rates..If it does this will expose the common investor belief that interest rates is a primary driver..Before Monetary Policy (pre 1980) interest rates relationship with the Stock market was often the opposite to what it is today... often (not always) back then when the interest rates declined so did the Stock market...With the interest rate tool back in the toolbox are we going to see that pre 1980's type scenario again when the near future very low interest rates significantly fails to drive the market higher???

do you see any inflation really happening , its more like deflation is the problem at the moment and rates this low is just a by product of that.

[bull....]

anyway the stock market didnt like the fact fed didnt give some more juice selling off today on that.

didnt know trump was a grifter but the tik tok deal if it goes thru , would sort of smack of grift under the threat of national security issues wouldnt it?

[Hoop]

do you see any inflation really happening , its more like deflation is the problem at the moment and rates this low is just a by product of that.

"do you see any inflation really happening...." My opinion is the Central Banks will have it's work cut out by trying to raise inflation..The media mentions demographic reasons with a huge number of baby boomers with wealth (large savings/assets) exerting downward pressure on interest rates thus reducing inflationary pressures...What the media has not mentioned very much is looking back in history we see secular cycle periods of inflation/deflation..since the end of the 1930's something changed and that cycle has been halted..but...history also tells you that during Industrial Revolutions the deflation cycle operated....So I guess what we are seeing for the last couple of decades is this deflationary pressure being exerted by the current Industrial Revolution we are in..This Industrial Revolution (Number 4) is not over yet...and..as it has come on the heels of the Industrial Revolution 3 (IR3) this current IR4 may be with us for another decade or more or it may lead us into IR5...Looking back on history the periods between IR's is exponentially deceasing and if the Futurists are correct (e.g Ray Kurzweil (https://en.wikipedia.org/wiki/Predictions_made_by_Ray_Kurzweil#Accuracy_of_predi ctions)) that the world moves exponentially not linearly, then change will increase at an ever increasing speed... so I see increasing waves of downward pressure on inflation..Stuff ups with supply and demand would create high inflation so future high (hyper) inflation can not be ruled out, but this isn't an upward pressure environment at the moment so the Central banks have to exert extra upward pressure to make higher inflation happen as it won't happen naturally..

"... its more like deflation is the problem at the moment and rates this low is just a by product of that. " My opinion on this is... the downward pressure on inflation is not the problem until deflation gets to more than -1% when it then starts to impact on growth rates.. e,g the Supply/Demand side of things..

Debt is the worry now...Moderate amount of debt can create growth but there is a limit before it stifles (long term) growth..from my readings the economists use to think 160% GNP was the debt limit but I think they have revised that percentage figure upwards as the interest rates keep dropping to unthinkable lows...Of course with increasing debt the only way to increase growth is the ("chicken or the egg spiral") decreasing the cost to service that debt,, so it seems a low interest rate environment is here to stay until debt is reduced either by pay back or debt devaluation by inflation...It seems the FED is now signalling it will (try to) add inflation into the mix..

End of Rant..whew! :cool:

[BlackPeter]

Well, higher inflation combined with low interest rates certainly would help to reduce the debt bubble. Let inflation pay for the public debt mountains. I guess the poor soules having to pay the bill in that situation would be the holders of long term near zero rated bonds, who would lose much of the value of their money which they wanted to preserve by buying the bonds in the first place.

Problem with this solution is that many of the bond holders are either banks or other financial institutions (which would have to write off huge amounts of their balance sheets) or pension schemes.

Crashing banks and pension funds is not exactly what we need ... however - the other options to get out of the current situation (like states being unable to repay their debt and going bankrupt or decade long austerity) don't look much more palatable either.

Interesting times ;):

[Aaron]

do you see any inflation really happening , its more like deflation is the problem at the moment and rates this low is just a by product of that.

Try changing the category from "general CPI" to "Housing" 7% compounding for the last 20 years.
https://www.rbnz.govt.nz/monetary-policy/inflation-calculator

Not sure about the site but NZX50 from 1,632 to 11,797 what does that work out to somewhere north of 10% compounding annually. Although this is a gross index which includes dividends.
https://tradingeconomics.com/new-zealand/stock-market

I suspect a large part of the increase is 20 years of lower and lower interest rates.
I see inflation, lots of it and policies like low interest rates designed to drive it higher. Just not inflation for the for the large chunk of NZ without assets.

I would like to see deflation.

[Hoop]

Well, higher inflation combined with low interest rates certainly would help to reduce the debt bubble. Let inflation pay for the public debt mountains. I guess the poor soules having to pay the bill in that situation would be the holders of long term near zero rated bonds, who would lose much of the value of their money which they wanted to preserve by buying the bonds in the first place.

Problem with this solution is that many of the bond holders are either banks or other financial institutions (which would have to write off huge amounts of their balance sheets) or pension schemes.

Crashing banks and pension funds is not exactly what we need ... however - the other options to get out of the current situation (like states being unable to repay their debt and going bankrupt or decade long austerity) don't look much more palatable either.

Interesting times ;):

Yes indeed..
It seems the overuse of QE .. has dug itself a hole..actually still digging deeper

[bull....]

Try changing the category from "general CPI" to "Housing" 7% compounding for the last 20 years.
https://www.rbnz.govt.nz/monetary-policy/inflation-calculator

Not sure about the site but NZX50 from 1,632 to 11,797 what does that work out to somewhere north of 10% compounding annually. Although this is a gross index which includes dividends.
https://tradingeconomics.com/new-zealand/stock-market

I suspect a large part of the increase is 20 years of lower and lower interest rates.
I see inflation, lots of it and policies like low interest rates designed to drive it higher. Just not inflation for the for the large chunk of NZ without assets.

I would like to see deflation.

yep the decades long decline in rates and the boom in credit has made this a golden time for what they say the baby boomers.

[bull....]

Yes indeed..
It seems the overuse of QE .. has dug itself a hole..actually still digging deeper

where will it end ? the great depression may hold clues as the only real comparison period

[bull....]

Dow drops 370 points as tech hits market again, stocks head for third straight down week
https://www.cnbc.com/2020/09/17/stock-futures-are-flat-in-overnight-trading-after-dow-snaps-a-4-day-win-streak.html

off the lows now though but indices are in a clear short term sideways pattern now so need to watch which way it breaks. things might get choppy anyway as US elections come into focus so probably a time to be cautious.

[dibble]

I see inflation, lots of it and policies like low interest rates designed to drive it higher. Just not inflation for the for the large chunk of NZ without assets.

I would like to see deflation.

I see it too. Not sure where deflation would come from. Despite being told over the last few years a lack of inflation is worrying, it is difficult to think of anything that hasnt gone up in price or shrunk in size (in many cases both) by at least 10% in the same timeframe. Perhaps the basket of goods needs reconfiguring, I havent looked in years but perhaps air tickets and flat screen TVs are in there dragging down the CPI. Many prices have bumped up even in the last few months.

[bull....]

statistically this week is a bad week for equities with only 25% of the time the week after quad witching stocks rising



On the week after, the indexes have historically seen declines with average losses of -1.03%, -1.10% and -1.24% for the Dow, S&P 500 and NASDAQ respectively


What to Expect on Quadruple Witching Day
https://www.cnbc.com/id/49105154

anyway more importantly markets will start to price in a trump loss if they are believing in the polls.

[BlackPeter]

statistically this week is a bad week for equities with only 25% of the time the week after quad witching stocks rising



On the week after, the indexes have historically seen declines with average losses of -1.03%, -1.10% and -1.24% for the Dow, S&P 500 and NASDAQ respectively


What to Expect on Quadruple Witching Day
https://www.cnbc.com/id/49105154

anyway more importantly markets will start to price in a trump loss if they are believing in the polls.

Maybe ... but more likely it is just markets starting to realise that they are already for some time away with the fairies :):

Whatever it is ... agree that the likelihood for down is higher than the likelihood for up. No matter how the Washington circus continues ...

[clearasmud]

My gurus are saying the uptrend is still intact
What we are seeing now is a rotation out of techs into industrials/laggards.

[bull....]

My gurus are saying the uptrend is still intact
What we are seeing now is a rotation out of techs into industrials/laggards.

yes was but that wont find the bottom in a correction , need the whole market to correct to get a true bottom

[bull....]

final fed meeting this week before the US election so this will add to a interesting week shaping up from a technical standpoint also. watching 3330 on the s&p500 and the quarterly bars

we have the breakdown from the range today , bearish

[Entrep]

https://media1.giphy.com/media/2GjgvS5vA6y08/giphy.gif?cid=4d1e4f29bf4e187f3468a708a65ad5cb098e 4c919e187dbb&rid=giphy.gif

[couta1]

we have the breakdown from the range today , bearish Fantastic as I'm currently feeding the bears.

[BlackPeter]

Beautiful head and shoulders on the DOW (lower lows). Not quite convinced the recent downturn was just a breather (rather than a trend change). Ah well, time will tell, it always does ...

11955

[winner69]

Beautiful head and shoulders on the DOW (lower lows). Not quite convinced the recent downturn was just a breather (rather than a trend change). Ah well, time will tell, it always does ...

11955

Suppose in these weird times a head and shoulders should include a face mask.

[BlackPeter]

Suppose in these weird times a head and shoulders should include a face mask.

Only if there is an infection risk .... but given that these patterns are often many months apart I think we can allow them to freely breath through and just enjoy the trend change :);

[bull....]

Only if there is an infection risk .... but given that these patterns are often many months apart I think we can allow them to freely breath through and just enjoy the trend change :);

yea i have my war chest ready once the uncertainty of current risks abate

[peat]

yea i have my war chest ready once the uncertainty of current risks abate

if there is not one fear there is always another.... markets climb the wall of worry.

[bull....]

if there is not one fear there is always another.... markets climb the wall of worry.

yep they do in a bull market , but having some cash available is always smart for oportunities

[bull....]

Billionaire Barry Diller calls stock market ‘great speculation,’ urges everyone to save cash
Each day from now until November is going to get more and more concerning, and more and more decisive, and more and more difficult

https://www.cnbc.com/2020/09/22/barry-diller-calls-stock-market-great-speculation-says-to-save-cash.html

[peat]

Billionaire Barry Diller calls stock market ‘great speculation,’ urges everyone to save cash


Each day from now until November is going to get more and more concerning, and more and more decisive, and more and more difficult

https://www.cnbc.com/2020/09/22/barry-diller-calls-stock-market-great-speculation-says-to-save-cash.html

advises against speculations
buys into casino

[bull....]

MARKETS (https://www.cnbc.com/markets/)Interactive Brokers braces for election volatility by telling clients to put up more cash
Elevated option implied volatilities indicate that the markets will be confronting elevated volatility both before and after the November 2020 election,

https://www.cnbc.com/2020/09/23/interactive-brokers-braces-for-election-volatility-by-telling-clients-to-put-up-more-cash.html

[bull....]

the US markets rallied yesterday to test the break down level 3330 , to day that has been respected to confirm the breakdown level

[couta1]

the US markets rallied yesterday to test the break down level 3330 , to day that has been respected to confirm the breakdown level Lots of volatility incoming over the next couple of months.

[bull....]

Lots of volatility incoming over the next couple of months.

yea imagine if trump lost and refused to leave office as just one example

[Gregnz]

yea imagine if trump lost and refused to leave office as just one example

Considering they are predicting a Trump win (https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12366438), I don't think we have to worry about either scenario. I hope its not true, but seems many Americans love him.

[bull....]

Considering they are predicting a Trump win (https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12366438), I don't think we have to worry about either scenario. I hope its not true, but seems many Americans love him.

actually the market is paying premium now for a contested election outcome , dec volatility is for potential massive extreme swings

[mfd]

Considering they are predicting a Trump win (https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12366438), I don't think we have to worry about either scenario. I hope its not true, but seems many Americans love him.

Betfair market is currently implying a 44% chance of him winning. Still too high for my liking.

https://www.betfair.com.au/exchange/politics/event/28009878/multi-market?marketIds=1.128151441

[blackcap]

Betfair market is currently implying a 44% chance of him winning. Still too high for my liking.

https://www.betfair.com.au/exchange/politics/event/28009878/multi-market?marketIds=1.128151441

Betfair only gave him a 16% chance in 2016. Same mistakes being made by Democrats this time as last with candidate and "Trump bad" approach. Trump will get in comfortably.

[bull....]

Trump refuses to commit to a peaceful transition of power after Election Day
(CNN)President Donald Trump (http://www.cnn.com/specials/politics/president-donald-trump-45) on Wednesday would not commit to providing a peaceful transition of power after Election Day, lending further fuel to concerns he may not relinquish his office should he lose in November.

htmlhttps://edition.cnn.com/2020/09/23/politics/trump-election-day-peaceful-transition/index.html

just what we were saying could lead to big fireworks and trump said just a while ago see what happens

[blackcap]

Trump refuses to commit to a peaceful transition of power after Election Day
(CNN)President Donald Trump (http://www.cnn.com/specials/politics/president-donald-trump-45) on Wednesday would not commit to providing a peaceful transition of power after Election Day, lending further fuel to concerns he may not relinquish his office should he lose in November.

htmlhttps://edition.cnn.com/2020/09/23/politics/trump-election-day-peaceful-transition/index.html

just what we were saying could lead to big fireworks and trump said just a while ago see what happens

CNN is not really an impartial source though. They will spin it anti Trump anyway they can.

[bull....]

CNN is not really an impartial source though. They will spin it anti Trump anyway they can.

yes no love lost between them eh , but he did say when asked by that reporter that the ballot voting might be rigged if he lost ... fair to question?

[Balance]

RBNZ moving to pressure interest rates down lower and faster :

https://www.interest.co.nz/news/107192/rbnz-affirms-guidance-hold-ocr-025-until-march-says-funding-lending-programme-would-be

https://www.goodreturns.co.nz/article/976517535/rbnz-bank-funding-programme-imminent-reaction.html

Excerpt : "The Reserve Bank’s (RBNZ) Monetary Policy Committee is planning to introduce a Funding for Lending Programme (FLP) before it cuts the Official Cash Rate (OCR) next year.
It essentially wants to push interest rates lower in coming months without going back on its word and cutting the OCR before March 2021."

Watch for billions of dollars of maturing bank deposits to flood into high yielding stocks in the next few months on the NZX as a first response.

[mfd]

CNN is not really an impartial source though. They will spin it anti Trump anyway they can.

BBC is reporting it in exactly the same way. I know we've all got used to this kind of thing over the last few years, but do step back and think about how far from common decency and democratic norms this is. The president is meant to be trustworthy and reliable, not to fan the flames of conspiracy and possible civil war.

[clearasmud]

Betfair only gave him a 16% chance in 2016. Same mistakes being made by Democrats this time as last with candidate and "Trump bad" approach. Trump will get in comfortably.
Trump is going to lose. Yay we don't need that disruptive actor. He is bad news for international trade.

[Balance]

BBC is reporting it in exactly the same way. I know we've all got used to this kind of thing over the last few years, but do step back and think about how far from common decency and democratic norms this is. The president is meant to be trustworthy and reliable, not to fan the flames of conspiracy and possible civil war.

https://www.news.com.au/finance/work/leaders/donald-trump-refuses-to-commit-to-peaceful-transfer-of-power-if-he-loses-election/news-story/15811023ed9ea2a16df188779c21ae17

Nothing to do with CNN bias - this is on the record from all the news media.

[Balance]

Trump is going to lose. Yay we don't need that disruptive actor. He is bad news for international trade.

He could win - and the rest of the world will move onwards & forward without the US.

[blackcap]

Trump is going to lose. Yay we don't need that disruptive actor. He is bad news for international trade.

You sure he is going to lose? Tell you what, I will give you odds of 1.50 (66%) on anyone but Trump for as much as you like. Didn't think so.

[bull....]

i think he just got the gun vote , gun sales will sky rocket after those comments

[sb9]

You sure he is going to lose? Tell you what, I will give you odds of 1.50 (66%) on anyone but Trump for as much as you like. Didn't think so.

Yeah, if I'm a betting man I would back Trump to win again based on nothing but Americans are mad and crazy

[mfd]

Edit: double post

[clearasmud]

So if I bet 100 dollars and win you pay me 150?

[blackcap]

So if I bet 100 dollars and win you pay me 150?

Yep that is $50 winnings and your stake of $100 back, but if you lose I keep the $100.

Simply put you win I give you $50,
I win you give me $100.

[clearasmud]

Let's just see who wins.

[Crypto Crude]

Lol you lot are all crazy as hell...

Trump is doing an amazing job ...

Most people arent hoodwinked as much as you all are by mainstream fake news media...
(Corrupt news media)...

[Timesurfer]

Yeah, if I'm a betting man I would back Trump to win again based on nothing but Americans are mad and crazy

Or based on the fact that the number of US presidents that didn’t get back in for a second term is a very small list, I’d say your odds are pretty good.

[Hoop]

Note: Navigating the links within this post will be time consuming

With the FED meeting..the NZ Treasury report already out and the soon to be released NZ GDP numbers,this maybe the time to revisit the Yale University's 4 R's model.

A fewf months ago I mentioned the 4 R's a lot in my posts, but it seemed back then to have conflicted with the media's position..Media and the market expectations were ahead of the ball game...and you don't fight against the market..
In saying the above the 4 R's is still a brilliant way to figure out what the Reserve Bank/FED and the Governments are going to do next, and so we can take that crystal ball and make decisions about what to expect in the near future...By now nearly everyone will have observed that most of the Countries in the World are applying very similar Monetary and Fiscal methods..All these methods are contained in Yale's 4R's model...In other words everyone is singing the same song sheet...this makes it easier to "accurately" assume what the Government and Central Banks are going to do next.

The 4 R's Model are Run...Repair.....Recession.....Recovery...(This link article is 4 months old but it has updated links) (https://som.yale.edu/news/2020/05/ypfs-describes-four-phase-model-of-the-economic-consequences-of-pandemic)
Contrary to Media and Markets...we are not in economic recovery stage yet!!!....We are in the Recession stage of the 4 R's model..If you want to accurately look forward in your decision-making you have to remind yourself of that.

Each stage of the 4 R's model has the recommended Fiscal and Monetary actions to help combat a "crisis/aftermath" event...

While the recovery stage is next..These latest reports out this week has a theme..not as bad as previously predicted and this recession could last longer than previously thought...

The conflict:..The media and public think we are in recovery based mainly on the v shaped bounce of the Equity markets and businesses reopening after lock down...This is not a change of stage (recovery) but a monetary manipulated and then sentiment fueled positive reaction designed by the repair stage actions ... lowering interest rates flooding the economy with money, rent and eviction freezes, Government support..etc (see more on the Yale University link above)..

Recovery Stage:...We are not there yet but looking ahead, what will be the Government and Central Banks actions in this stage? ..Too many to list here on this post but here is one to wet your appetite..Bank resources strain (Government to advise/action the halt of Bank dividends to shareholders ...may need money injection into the banking system..etc)..This was telegraphed by Sir John Key's looking forward statement a few months ago...See the links to view the other recommended actions and results of earlier stage actions to date.

Other links with included links:
Covid 19 Crisis ..Fiscal Response trackers

(https://som.yale.edu/faculty-research-centers/centers-initiatives/program-on-financial-stability/covid-19-crisis)Policy Responses to the Coronavirus Epidemic (https://ourworldindata.org/policy-responses-covid)

James Bullard St Louis FED president announces full recovery is possible by the end of the year. (https://www.marketwatch.com/story/feds-bullard-says-us-economy-within-reach-of-full-recovery-this-year-2020-09-24?cx_testId=49&cx_testVariant=cx_1&cx_artPos=0&mod=home-page-cx#cxrecs_s)..which suggests the US recovery phase is rapidly underway.
I think NZ is also leaving the recessionary phase and rapidly entering the recovery phase..
This shows that the theoretical modelling actions being used during the Run and Repair phases were highly successful and helped to reduce the severity of the Recessionary phase (also stopped the worse case Depression scenario) and quickly moved us into the Recovery phase.
Don't celebrate yet as the Recovery phase has it's own set of pain..the lagging sectors now start to react to the recessionary pain and overall sectors recovery will be uneven, some damaged Companies will fail, and the Media will be quick to highlight this doom and gloom..This is the time to make sure Banks have enough money to keep the recovery phase momentum moving forward..

What to expect:..As an investor the best strategy is to identify what recovery phase actions the Government and Reserve Banks will likely use and predict what effect that will have on our investments going forward.

Yale's 4R's Model outlines the theoretical actions needed during the recovery phase..So far with the first 3 R's the Governments and Central Banks have been rather consistent and have actioned what theory has suggested. The Yale modelling is tracking all countries actions (https://docs.google.com/spreadsheets/d/1s6EgMa4KGDfFzcsZJKqwiH7yqkhnCQtW7gI7eHpZuqg/edit#gid=0)...NZ's actions are interesting.

It is reasonable to assume the Countries during the fourth R (recovery phase) will follow similar theoretical lines..

[Leftfield]

Some great links and research there Hoop, Thanks for sharing.

[peat]

NZ market on fire today....(well from my perspective anyway - it appears the NZ50 index not so much when I fact check myself)
US market tonight, maybe will struggle. As far as I can see we are still in an at least temporary corrective phase over there. Hopefully corrective anyway ;+)

[arc]

Crypto starting to attract attention for its mostly criminal bias. Talk of some "intervention" going to happen, most likely USA style seizing and removal of accounts.

[Entrep]

Crypto starting to attract attention for its mostly criminal bias. Talk of some "intervention" going to happen, most likely USA style seizing and removal of accounts.

Any source, for either point?

https://www.cnbc.com/2020/09/23/jpmorgan-to-pay-almost-1-billion-fine-to-resolve-us-investigation-into-trading-practices.html

[JBmurc]

https://www.kitco.com/news/2020-09-29/All-markets-even-gold-are-about-to-crash-says-investor-in-all-cash.html

Markets will see a major correction soon, most likely before the presidential election, said Clem Chambers of InvestorsHub, who has allocated all his holdings into cash.

“I got a warning from the market about ten days ago…so I cleared the decks because I think it’s highly likely, not absolutely certain, but too likely to be in the markets that we’re going to be in for a crash,”

[bull....]

President Donald Trump says he has tested positive for coronavirus
https://www.cnbc.com/2020/10/02/president-donald-trump-says-he-has-tested-positive-for-coronavirus.html

futures tanking

[King1212]

Great....let him die...so world would be much better...

[Greekwatchdog]

I wonder if he will take this serious now?

[King1212]

Market should takes it positive!!!!

[Cadalac123]

LOL gotta love the stock market. Futures tank on this type of news. Great top-up last minute of market

[King1212]

Market is so donkey.....the world should chers up....because karma is existed....

As a world leader...trump should lead the pandemic solutions not to stir everything up n make the pandemic worst.

Market should celebrate!

[Beagle]

Market is so donkey.....the world should chers up....because karma is existed....

As a world leader...trump should lead the pandemic solutions not to stir everything up n make the pandemic worst.

Market should celebrate!

Agree 100% Arguably he has been the architect of the most hapless response to this virus of any country in the developed world. Karma, comeuppance, principle's of natural justice playing out, call it what you will but if he's headed out of power that's definitely cause for celebration !!

[JSwan]

It's funny that Air NZ (AIZ) in Australia was on a tear this afternoon (along with other Australian travel stocks) after the trans-tasman bubble announcement between NZ and the two Australian states, then came the Trump news and it literally gave up all it's gains to only end +1.6%, will probably recover massively on Monday.

[Joshuatree]

He said the end of the pandemic is in sight a few days ago.Anything for attention ehh,he's losing on the polls ATM,conspiracy?

[JSwan]

He said the end of the pandemic is in sight a few days ago.Anything for attention ehh,he's losing on the polls ATM,conspiracy?

He even said a vaccine was coming in the next few weeks during the debate, smh :t_down:

[workingdad]

He’ll be fine, nothing drinking a bit of bleach won’t fix haha

[JSwan]

He’ll be fine, nothing drinking a bit of bleach won’t fix haha

Are you being sarcastic? *injects hydroxychloroquine*

[workingdad]

Are you being sarcastic? *injects hydroxychloroquine*

Yes.... very.....sarcastic, after all it was his suggestion :)

https://www.bbc.com/news/amp/world-us-canada-52407177

[CCcc]

Haha.... hopefully sp in nz is not dropping on Monday.

[King1212]

US will release the vaccine now!

[bullfrog]

It’s just a conspiracy to make him look bad

[Cyclical]

Great....let him die...so world would be much better...

King, you're not supposed to say that sort of thing, even if most of us are thinking it. Of course what will likely happen is he'll get through it with minor symptoms and then we'll need to hear him go on about how it's just like a head cold and nothing to worry about, let's open everything up and party.

[King1212]

Many people die because of him .. stirring up the situation....u all know it....

[bull....]

guess trump will be doing mail in voting

[BlackPeter]

He’ll be fine, nothing drinking a bit of bleach won’t fix haha

Didn't he say you should inject it? Hope he is following his advice.

Hear as well that Brazil still has containers full of hydroxychloroquine he sent them as "Covid relief". Obviously - it didn't help, but maybe they can send it back to help the Americans to treat the sick monster baby.

[Zaphod]

King, you're not supposed to say that sort of thing, even if most of us are thinking it. Of course what will likely happen is he'll get through it with minor symptoms and then we'll need to hear him go on about how it's just like a head cold and nothing to worry about, let's open everything up and party.

Yes, exactly. He'll downplay it as much as possible, while pointing to the soaring sharemarket.

[JSwan]

Yes, exactly. He'll downplay it as much as possible, while pointing to the soaring sharemarket.

He said he and his wife are doing "very well"

https://twitter.com/realDonaldTrump/status/1312158400352972800

[Ggcc]

He said he and his wife are doing "very well"

https://twitter.com/realDonaldTrump/status/1312158400352972800
Better than most I would say. Better than the best of all the others. He is now positively positive or negatively positive. I don’t know anymore.

[Zaphod]

Some of the videos released by the WH could have been prerecorded. I'm sure all of this is going to help keep markets volatile for the foreseeable future.

[BlackPeter]

DOW - Head and Shoulders?

11995

[Hoop]

DOW - Head and Shoulders?

Hmmm..maybe..if it is, its pullback has gone above the neckline break which could (not always) suggest a failure or there is an overriding (more powerful) pattern in play (It's common to have patterns within patterns) ....That overriding pattern could be the 5 month upward sloping asymmetrical complex head and shoulder pattern (https://www.google.com/search?client=firefox-b-d&q=upward+sloping+asymmetrical+complex+head+and+sho ulder+pattern) which confirmed its pattern (neck line break) back in mid September, and the recent rally is it's pull back to test its neck line. The pull back to test the break line is considered a second chance to sell..

For those people not used to reading charts, put a small ruler at 45 degree angle starting at the bottom on BlackPeter's chart's left side (up-sloping) and you will begin to see the upward sloping H&S pattern..The Head occurred on the 8th of June, it has many shoulders and necks (complex)..more on the righthand-side than on the lefthand-side (asymmetrical)..Asymmetric H&S aren't as reliable as Symmetric, they have higher failure rates..
To an untrained eye many sloping H&S patterns are missed..even those perfect sloping symmetrical ones which have a very reliable prediction outcome (very low failure rate)..

[peat]

Never taken much stock in sloping H+S myself.
For crooked hunchbacks? :p

oh and PS Hoop has a lot more credentials than me.

[bull....]

Trump says he will leave Walter Reed on Monday:
well those super drugs must be good , back to business as usual for trump

[King1212]

Hate uncle trump but love him as well. The only us president that able to move the market up n down with a single tweet! Here we come.... Market at full charge!

[bull....]

US markets rotation still on tech to other sectors to a degree , rut raging on stimulus hopes , transports at new highs even the dow utilities which we mentioned seems like mths ago as a pattern in the making broke out of the ascending triangle to the upside today.

In NZ interest in utilities as gentailers , property stocks and retirement stocks have all been in demand again lately probably due to ORR going to implement new measures shortly to drive deposit rates heaps lower vrs the once popular atm ,fph and techs here not so in favour , so nz getting its own sort of rotation move as well.

[bull....]

Hate uncle trump but love him as well. The only us president that able to move the market up n down with a single tweet! Here we come.... Market at full charge!

trump did it again sent a tweet to say stimulus is off and the market tanks 500 pts in 5 mins

[Balance]

trump did it again sent a tweet to say stimulus is off and the market tanks 500 pts in 5 mins

Good. Another opportunity to pick up some stocks which will be beaten up, ahead of the Federal Reserve taking action to free up more money and stimulate the economy.

[bull....]

Good. Another opportunity to pick up some stocks which will be beaten up, ahead of the Federal Reserve taking action to free up more money and stimulate the economy.

powell just today pleaded with congress for more stimulus. why because he knows they cant print forever

In one of his strongest appeals to date, Federal Reserve Chair Jerome Powell warned of a weak U.S. recovery without sufficient government aid and said providing too much stimulus wouldn’t be a problem.

https://www.bloomberg.com/news/articles/2020-10-06/powell-warns-of-weak-u-s-recovery-without-enough-government-aid?srnd=premium-asia

[Balance]

powell just today pleaded with congress for more stimulus. why because he knows they cant print forever

In one of his strongest appeals to date, Federal Reserve Chair Jerome Powell warned of a weak U.S. recovery without sufficient government aid and said providing too much stimulus wouldn’t be a problem.

https://www.bloomberg.com/news/articles/2020-10-06/powell-warns-of-weak-u-s-recovery-without-enough-government-aid?srnd=premium-asia


Of course he can print forever - just not his preference. Negative interest rates is not something he wants to do but if he needs to, he will.

[Leftfield]

Good. Another opportunity to pick up some stocks which will be beaten up, ahead of the Federal Reserve taking action to free up more money and stimulate the economy.

There may be more bargain priced share buying opportunities as we inch to a USA election result. I've increased my cash allocation accordingly..... but think it's a tab too early for bargain hunting just yet. Interesting times!

[Zaphod]

The turmoil will probably continue well after the election, especially if the results are marginal.

[Balance]

The turmoil will probably continue well after the election, especially if the results are marginal.

Volatility rather than turmoil.

Federal Reserve extremely vigilant and if need be, I believe they will pump trillions of dollars more to cushion the economy.

[bull....]

Volatility rather than turmoil.

Federal Reserve extremely vigilant and if need be, I believe they will pump trillions of dollars more to cushion the economy.

they wait till after election results till they show there hand

[bull....]

US markets rotation still on tech to other sectors to a degree , rut raging on stimulus hopes , transports at new highs even the dow utilities which we mentioned seems like mths ago as a pattern in the making broke out of the ascending triangle to the upside today.

In NZ interest in utilities as gentailers , property stocks and retirement stocks have all been in demand again lately probably due to ORR going to implement new measures shortly to drive deposit rates heaps lower vrs the once popular atm ,fph and techs here not so in favour , so nz getting its own sort of rotation move as well.

still major demand for div paying stocks going on in NZ , advance positioning ahead of ORR big announcement probably. like i be saying for ages get your income why you can

[bull....]

just released this afternoon --- getting ready for the big boozookaaaaa .... get your income why you can

Reserve Bank hints at its Funding for Lending Programme having few conditions and not necessarily needing to be implemented with a negative OCR

https://www.interest.co.nz/banking/107439/rbnz-hints-its-funding-lending-programme-having-few-conditions-and-not-necessarily

[Zaphod]

Volatility rather than turmoil.

Federal Reserve extremely vigilant and if need be, I believe they will pump trillions of dollars more to cushion the economy.

Depends. IMO, if Trump doesn't win by a landslide, expect turmoil as his supporters revolt.

[Ferg]

Depends. IMO, if Trump doesn't win by a landslide, expect turmoil as his supporters revolt.
You could also say that if Biden doesn't win, expect turmoil as his supporters revolt.

[peat]

I went to Welly and Zealandia today so out of the loop
What a day - every single stock I have an interest in went up except for one. And that's the one I am short.

So I recommend everyone takes a day off it does you the world of good.
And you get to see a tuatara
12001

[bull....]

I went to Welly and Zealandia today so out of the loop
What a day - every single stock I have an interest in went up except for one. And that's the one I am short.

So I recommend everyone takes a day off it does you the world of good.
And you get to see a tuatara
12001

totally relaxes the body and mind

[bull....]

Cannabis stocks get a broad boost after veep-candidate Kamala Harris said Biden administration would decriminalize marijuana

[W]e will decriminalize marijuana, and we will expunge the records of those how have been convicted of marijuana,” Harris said in the vice-presidential debate late Wednesday

https://www.marketwatch.com/story/cannabis-stocks-get-a-broad-boost-after-veep-candidate-kamala-harris-said-biden-administration-would-decriminalize-
marijuana-11602170817?mod=home-page (https://www.marketwatch.com/story/cannabis-stocks-get-a-broad-boost-after-veep-candidate-kamala-harris-said-biden-administration-would-decriminalize-marijuana-11602170817?mod=home-page)

well big policy shift by the conservative biden obviously moving with the times

[bull....]

continuing on from last week the best performers this week still are the stocks with good reliable divs , gentailers , retirement stocks , property stocks some retailers and telco's

[peat]

... thinking it might be a good day to take something off the table.... who knows what blackness will come out of the US tonight , ready for our market to react to on Monday.
B, I always sell too soon.

I'm liking the look of ANZ chart.

But SP500 looks a bit stretched in the short term
12002

[bull....]

... thinking it might be a good day to take something off the table.... who knows what blackness will come out of the US tonight , ready for our market to react to on Monday.
B, I always sell too soon.

I'm liking the look of ANZ chart.

But SP500 looks a bit stretched in the short term
12002

just broke thru resistance at 3400 odd so see if it holds above there i reckon

[Balance]

https://www.landlords.co.nz/article/976517617/four-ways-low-rates-have-boosted-the-market

4 ways low interest rates have boosted the property market in NZ

and

are boosting the NZ sharemarket as well imo.

[winner69]

https://www.landlords.co.nz/article/976517617/four-ways-low-rates-have-boosted-the-market

4 ways low interest rates have boosted the property market in NZ

and

are boosting the NZ sharemarket as well imo.

Sure does mate

But the economy remains rooted ....and likely to remain so for some time

[Balance]

Sure does mate

But the economy remains rooted ....and likely to remain so for some time

Impossible to go against the flow of funds, W69 - akin to whistling against a hurricane!

Lower for longer (interest rates) and higher for just as long (markets).

[winner69]

Impossible to go against the flow of funds, W69 - akin to whistling against a hurricane!

Lower for longer (interest rates) and higher for just as long (markets).

So right .......got to make the most of it .....and I’ll probably won’t care when the merry go round stops and it all turns to custard

[Balance]

So right .......got to make the most of it .....and I’ll probably won’t care when the merry go round stops and it all turns to custard


Make sure you leave the last 15% in for the last holder so you can get out!

[BlackPeter]

Make sure you leave the last 15% in for the last holder so you can get out!

Great advise. Only small technical question ... how do you measure the last 15% if the peak against which you are measuring still might be in the future?

[winner69]

Can’t recall who said this yesterday -

“New Zealand lives on the sovereign margin--low government investment, high private debt, low wages, export oriented. The strengths of a floating sovereign currency have been eaten away--New Zealand mirrors many developing nations with limited economic opportunities.”

Think it was meaning under a Labour Government for the next 6 years we are truly stuffed ...it was in connection with
A comment “We’re not even close to our ‘nuclear-free moment’” ....which seems to be a measure of how our PM keeps her promises.

[nztx]

Future of Kawerau paper mill uncertain


"This story was originally published on RNZ.co.nz and is republished with permission.

The future of another major industrial operation is under review because of the Covid-19 pandemic.

Norwegian forest products company Norske Skog is reviewing the future of its Tasman newsprint mill at Kawerau.

Norske Skog said Covid-19 has had a rapid, negative and likely irreversible impact on the industry in the region."

Likely flow on effects ?

Another large Industrial Enterprise with the microscope out on it's operations

Who can blame them when the current Political crew have the wallet open for all & sundry
to smooth the waves .. ;)

More at Link

https://www.stuff.co.nz/business/300130312/future-of-kawerau-paper-mill-uncertain

[bull....]

US markets seem to be unwinding the US election jitter protection trade to a degree as its looking more likely biden might win and there wont be a contested outcome.

[peat]

...

I'm liking the look of ANZ chart.



12009

On fire today up 3%

[Joshuatree]

US markets seem to be unwinding the US election jitter protection trade to a degree as its looking more likely biden might win and there wont be a contested outcome.

"Wont be a contested outcome" I believe its in trumps nature to contest, divide and go down causing chaos.

[bull....]

"Wont be a contested outcome" I believe its in trumps nature to contest, divide and go down causing chaos.

not long to wait and see

[bull....]

Reserve Bank would rather do 'too much':

Home loan rates could get as low as 1.5 per cent as the Reserve Bank throws its weight behind stimulating the economy

https://www.stuff.co.nz/business/300131658/reserve-bank-would-rather-do-too-much-will-it-come-to-regret-that


wow great strategy from the RBNZ with mortgage rates this low buying a house will be way cheaper than renting. they will stimulate the construction industry big time as house building demand will soar and all the downstream businesses of this. rents might even drop as less rental property demand as no immigration.
First home buyers are flooding the market for loans for potentially the best chance they have to buy a first home and the majority of people who are funding this is the term deposit people as there returns probably go negative after tax and inflation , but least they can feel happy they are helping young people get there first home.

get your income why you can and of course your first house

[bull....]

europe causing a bit of a red day on the screen at the moment , seems there second wave of virus is much bigger this time

European leaders are scrambling to put a cap on surging coronavirus infections in the region, with governments reimposing sweeping restrictions and shutdowns in an effort to curb infections

https://www.cnbc.com/2020/10/15/europes-coronavirus-crisis-france-state-of-emergency-uk-lockdown.html

mean while we are very lucky in NZ to be living a mostly normal life at the moment

Property and Stocks Boom as Investors Anticipate Ardern Victory
https://www.bloomberg.com/news/articles/2020-10-14/an-ardern-victory-isn-t-spooking-kiwi-investors-this-time-around

[Cyclical]

Reserve Bank would rather do 'too much':

Home loan rates could get as low as 1.5 per cent as the Reserve Bank throws its weight behind stimulating the economy

https://www.stuff.co.nz/business/300131658/reserve-bank-would-rather-do-too-much-will-it-come-to-regret-that


wow great strategy from the RBNZ with mortgage rates this low buying a house will be way cheaper than renting. they will stimulate the construction industry big time as house building demand will soar and all the downstream businesses of this. rents might even drop as less rental property demand as no immigration.

Do you think so though, bull? The COL tried and failed big time to build a lot of houses. What says the private sector will do any better? I don't know the ins and outs of why it was such a fail, but I guess the RMA, consenting, ability to free up suitable land, not enough skilled labour (exacerbated now with covid stopping foreign workers coming in), not enough unskilled labour, not enough young ones out there interested or being encouraged to get into the industry (I'm only guessing here). It takes a long time to turn these things around. I don't imagine money was an issue on the Kiwibuild front, but unfortunately it was still a massive fail and probably not a bad lesson for the government...will be interesting to see what they will do about the underlying issues, else we are going to have massive social issues going forward.

[Zaphod]

Given the current accelerating momentum, there is very little they can do about the issue now. Even replacing the RMA with something more developer friendly, is not going to be enough. House prices are rocketing ahead, and the average NZer who feels that they are winning on the backs of these rises, would never allow a government to undermine their investment. Aside from a crash, I can't see an effective intervention that any government could make.

[bull....]

Labour has won big, but now the real work starts

https://www.stuff.co.nz/national/politics/300131366/election-2020-labour-has-won-big-but-now-the-real-work-starts

Labour has promised a big infrastructure building program. But how it is rolled out and what the priorities are remains to be seen

im hoping they enable the kiwisaver , super fund to help , will mean more projects can be done why rates are low , makes them all viable.


In summary the article says

The question will be whether Ardern is prepared to spend her political capital to do what needs to be done. John Key wasn’t. It will be a mark of leadership if she does

[winner69]

Labour has won big, but now the real work starts

https://www.stuff.co.nz/national/politics/300131366/election-2020-labour-has-won-big-but-now-the-real-work-starts

Labour has promised a big infrastructure building program. But how it is rolled out and what the priorities are remains to be seen

im hoping they enable the kiwisaver , super fund to help , will mean more projects can be done why rates are low , makes them all viable.


In summary the article says

The question will be whether Ardern is prepared to spend her political capital to do what needs to be done. John Key wasn’t. It will be a mark of leadership if she does








Won’t enabling kiwisaver funds etc to help just lower returns ti Kiwisaver members

[bull....]

Won’t enabling kiwisaver funds etc to help just lower returns ti Kiwisaver members

no , the funds invest based on a acceptable rate of return ie public / private partnerships etc .. grant robinson was doing some work on this last term so lets hope he actually does it

[stoploss]

I think its more likely the "Superfund" will play a part in this ,not so much your average punter in a Kiwisaver scheme ?

[Timesurfer]

Because Kiwibuild was a roaring success. Your kiwi saver and super fund dreams will meet the same spectacular end for the same reasons.

[Arthur]

Kainga Ora is really starting to pump out the housing. If the Government leads from the front by supplying large numbers of well built warm dry housing at competitive prices (rather than bashing private landlords) the market will settle and the long term future for New Zealand will improve.

[Dlownz]

How's everyone feeling at the mo with the market. I've got a feeling we have maybe
one more good week before we see a slide again. The u.s is so close to elections now somethings got to give.
Just feels a little like January where it lures you into a false sense of security then boom.
Thinking things will start to bounce in December. Only time will tell I guess 🙂