Black Monday

[winner69]

Lowest consumer confidence since records began in this survey including at any time during the GFC file:///C:/Users/user/Downloads/ANZ-ConsumerConfidence-20220304%20(1).pdf
A lead indicator that people will be pulling their heads in on discretionary spending in a big way.

Just as well we're all immune for this because we all have plenty ;)

Not just consumers beagle --- farmers feeling really down as well

Farm confidence hits lowest point in decades: Federated Farmers

https://www.stuff.co.nz/business/farming/300538412/farm-confidence-hits-lowest-point-in-decades-federated-farmers

[mike2020]

I was a farmer for 30 years and I was always surprised by the amount of needless negativity the majority could come up with especially in the good times. Oddly stoic in the bad times. I always presumed it was the influence of the previous generation who grew up post WW2 but I didn't find the people I grew up with in the city to be like that.

[mike2020]

So to sum it all up, the farmers need a good kick in the nads to be happy, lets ban irrigation for pasture growth and stop the use of N outside of cropping and seeds. Do ourselves a collective favor for the future.

[winner69]

Everybody moaning and groaning ….but the country continues to live beyond its means

From Westpac - New Zealand's annual current account deficit widened to 5.8% of GDP in December, compared to 4.6% in September. Today's result was wider than our own and the market's forecast

[bull....]

Record 24 Covid-related deaths


https://www.nzherald.co.nz/nz/covid-19-omicron-outbreak-record-24-covid-related-deaths-19524-new-community-cases-971-hospitalisations/R23FYWPNEDJHLQOTQDGGCDHUAY/

Among the 24 deaths reported today were eight people who died at aged residential care facilities

well really taking off now , wait till the borders open.

that confidence index is going down

NZ posts a record $20 billion annual current account deficit

Infometrics principal economist Brad Olsen said the deficit was more evidence the country was at the tail-end of an economic cycle

https://www.stuff.co.nz/business/128072264/nz-posts-a-record-20-billion-annual-current-account-deficit

[BlackPeter]

Record 24 Covid-related deaths


https://www.nzherald.co.nz/nz/covid-19-omicron-outbreak-record-24-covid-related-deaths-19524-new-community-cases-971-hospitalisations/R23FYWPNEDJHLQOTQDGGCDHUAY/

Among the 24 deaths reported today were eight people who died at aged residential care facilities

well really taking off now , wait till the borders open.

that confidence index is going down

This must be one of your darker days, isn't it? People are optimistic, and optimism is for you what a red cloth is for any bull.

Have a look at all other countries who passed the Omicron peak already ... deaths tend to peak roughly 4 weeks after the peak of new infections. We know that and follow the well known trend, just that our death rates are ways lower than in most other countries. Nothing to see or worry here.

And your reference to opening the borders is laughable. Typically around ten cases per day who get caught in the test at the border anyway ... which means at worst a single figure of additional cases per day slipping through the border. This will make all the difference, given that we breed 20k cases per day by ourselves, won't it?

I guess considering worst case scenarios might have some merits (even if its not healthy if its the only thing people do ...), but making things up just in order to frighten people which don't make any sense at all?

I think you urgently need some balance. I do worry for you.

[alokdhir]

Everybody moaning and groaning ….but the country continues to live beyond its means

From Westpac - New Zealand's annual current account deficit widened to 5.8% of GDP in December, compared to 4.6% in September. Today's result was wider than our own and the market's forecast

But this supposed to be dreadful news could hardly dent NZD ...it need to fall to balance the economy towards more exports then just plain consumption as we all survived Covid ...Next few months are crucial from many angles ...But I reckon NZD will help rebalance the economy ...it always picks up the slack ...60 cents on cards

[Joshuatree]

Bottom is in according to a friend who's right half the time:)
Reduced some of my gold and energy stocks today.
Green mkts everywhere,some chinese
companies, tencent ,Alibaba up re 25%
Tech rebounding
Assumptions the Ukraine war is nearly over,Zelensky says joining Nato not an option
World is opening back up from Covid
But the Fed reports and raises int rates Thursday,how hawkish?

[winner69]

Fed has 0.25% point increase

They about as wimpish as our RBNZ


Orr will follow suit no doubt …no 0.5% for him

[alokdhir]

Fed has 0.25% point increase

They about as wimpish as our RBNZ


Orr will follow suit no doubt …no 0.5% for him

Its simple in their minds ...Inflation is lesser evil then Recession ...So it will be slow up only and smaller top only then what markets have already priced in...

Bottom is in ...slow grind up ahead ....provided we actually dont end up in recession ...IMO FED and other central banks will try their best to avoid that by tolerating inflation little more then required

[JohnnyTheHorse]

Its simple in their minds ...Inflation is lesser evil then Recession ...So it will be slow up only and smaller top only then what markets have already priced in...

Bottom is in ...slow grind up ahead ....provided we actually dont end up in recession ...IMO FED and other central banks will try their best to avoid that by tolerating inflation little more then required

I've lost count of how many times you've called a bottom in the last couple of months.

In saying that, I agree a short term bounce to set a weekly lower high is most likely from here as we now have enough information to conclude that. Change the weekly trend and then we can start talking about longer term bottoms being in, but there is significant work required by the bulls to achieve this.

[alokdhir]

I've lost count of how many times you've called a bottom in the last couple of months.

In saying that, I agree a short term bounce to set a weekly lower high is most likely from here as we now have enough information to conclude that. Change the weekly trend and then we can start talking about longer term bottoms being in, but there is significant work required by the bulls to achieve this.

Yes if it doesn't go below last bottom of 11700 then it can be called many times mate ...

Also I was just agreeing with Josh's view that bottom is in ...maybe u didn't read his post just above W69

[JohnnyTheHorse]

Yes if it doesn't go below last bottom of 11700 then it can be called many times mate ...

Also I was just agreeing with Josh's view that bottom is in ...maybe u didn't read his post just above W69

You cant call the bottom of a monthly trend with a daily trend change. Even if we get a bounce on the monthly we will now just be looking for a monthly lower high now (which I will be very aggressively shorting).

[Hoop]

But this supposed to be dreadful news could hardly dent NZD ...it need to fall to balance the economy towards more exports then just plain consumption as we all survived Covid ...Next few months are crucial from many angles ...But I reckon NZD will help rebalance the economy ...it always picks up the slack ...60 cents on cards

The NZ economy equation is heavily weighted on Imports/Exports variables...that means NZ's currency is affected by NZ trading partners currencies..the two biggest being China and Australia. Generally speaking (compared with all other Countries in the world) the strength of a Country's economic health = the strength of their currency..Both Australia and China have strong currencies and so has NZ.....I good place to be ..eh alokdhir.

Another major variable that affects a currency is interest rates difference (change) between other major trading Countries. With Monetary policy I personally can't see a lowering of the NZ$ / lowering short term interest rates differerntial within this current high inflation environment..

About 170 Countries trade their currencies each day...NZ may be a small Country but it's Currency NZ$ is the 10th most traded currency in the world (~ $70 Billion/day). The currency market is the biggest market in the world trading at around $US 6.6 Trillion/day (2019 data).
As we can imagine, manipulating the Forex every day to lower the NZ$ would become a very expensive exercise.

They say the Team of 5 million are starting to pull their heads in now and with expectation the future spending data will be down ...The currency market left alone to function usually auto-corrects..

[Tomtom]

Its simple in their minds ...Inflation is lesser evil then Recession ...So it will be slow up only and smaller top only then what markets have already priced in...

Bottom is in ...slow grind up ahead ....provided we actually dont end up in recession ...IMO FED and other central banks will try their best to avoid that by tolerating inflation little more then required Won't inflation, if it exceeds wage growth, eventually cause a recession by reducing real (inflation adjusted) spending?

To my way of thinking it's akin driving around in reverse because you are running out of petrol.

[winner69]

Yes Hoop …..we should look to a higher NZD and be proud of it

A low NZD is a sign of failure

[winner69]

GDP year to December 2021 +5.6% on pcp

That's pretty impressive

[BlackPeter]

GDP year to December 2021 +5.6% on pcp

That's pretty impressive

Is this with or without inflation?

[winner69]

Is this with or without inflation?

in real terms .... no inflation

[bull....]

and mostly all done on borrowed and printed money lol

[Bjauck]

GDP year to December 2021 +5.6% on pcp

That's pretty impressive
GDP in the year to December 2020 was -2.1% so much of the 2021 "growth" was bounce back recovery.

https://www.stats.govt.nz/news/gdp-rises-3-0-percent-in-the-december-2021-quarter

[winner69]

GDP in the year to December 2020 was -2.1% so much of the 2021 "growth" was bounce back recovery.

https://www.stats.govt.nz/news/gdp-rises-3-0-percent-in-the-december-2021-quarter

and only 1.7% pa over last 2 years ---- bit slack when it was GDP was 3% to 4% in years up to 2020

[Bobdn]

Uncomfortable week for the 🐻🐨 bears

[BlackPeter]

Uncomfortable week for the ���� bears

I like it that way :cool:

[nztx]

I like it that way :cool:


The Hawk likes looking down on the volatility .. thought 2022 was supposed to be the year of Volatility ? ;)

[GOAT]

What are peoples outlook for the markets in 2022 and 2023? I thought after the incredible (artificial) growth of the last year and a half, that we would see a prolonged period of exhaustion and drop off in the market.. if only we had a crystal ball.

[Habits]

What are peoples outlook for the markets in 2022 and 2023? I thought after the incredible (artificial) growth of the last year and a half, that we would see a prolonged period of exhaustion and drop off in the market.. if only we had a crystal ball.

Yes we will look back with our "20/20" glasses on. Like 100 years ago the roaring 20s we could experience a similar decade, 2 years in there has been built up a lot of wealth that those who have it can spend. There are jobs galore due to low migration and interest rates despite rising modestly, will still be very low. The inflation genie is out of the bottle and I think that encourages spending as it is cheaper today than tomorrow

[bull....]

Consumer confidence lowest since 2008 global financial crisis: Westpac survey

https://www.stuff.co.nz/business/industries/128125086/consumer-confidence-lowest-since-2008-global-financial-crisis-westpac-survey

i see bonds in the US had a big jump last night and in NZ they are hitting new high's this cycle.

Stock investors still in lala land

[BlackPeter]

Consumer confidence lowest since 2008 global financial crisis: Westpac survey

https://www.stuff.co.nz/business/industries/128125086/consumer-confidence-lowest-since-2008-global-financial-crisis-westpac-survey

i see bonds in the US had a big jump last night and in NZ they are hitting new high's this cycle.

Stock investors still in lala land




I guess time will tell whether it is stock investors or bond investors who are in lala land. Persistent Inflation will kill the value of bonds (it always did in the past), while stocks will survive even hyperinfaltion (they always did in the past) ...

Ah yes, but don't forget this time will be different - the bull is a bear ... though - he always was :);

[JohnnyTheHorse]

I guess time will tell whether it is stock investors or bond investors who are in lala land. Persistent Inflation will kill the value of bonds (it always did in the past), while stocks will survive even hyperinfaltion (they always did in the past)

Ever cared to look at what happened in the 70's? Those real returns on stocks were awfully negative.

[BlackPeter]

Ever cared to look at what happened in the 70's? Those real returns on stocks were awfully negative.

Depends on which stocks you did hold at that time. Solid companies producing useful products had a good return, even then (well, on global markets, didn't watch NZ at that time)

Quite different to the after inflation and after tax returns of bonds.

As well - it might help to broaden your perspective if you study more than one somewhat inflationary period. Who is saying that this will develop like the 70íes?

Just looking at the current geopolitical situation it might be more useful to study what happened to bonds vs stocks during in the 1920'íes ...

Obviously - anybody who managed to pick the peak in 1929, went (short before) that day into cash and went some months later back into stocks, made big money. But what for the majority of people without a working crystal ball?

Anybody who kept their money throughout the 1920'íes in bonds was a big looser ...

[JohnnyTheHorse]

Depends on which stocks you did hold at that time. Solid companies producing useful products had a good return, even then (well, on global markets, didn't watch NZ at that time)

Quite different to the after inflation and after tax returns of bonds.

As well - it might help to broaden your perspective if you study more than one somewhat inflationary period. Who is saying that this will develop like the 70íes?

Just looking at the current geopolitical situation it might be more useful to study what happened to bonds vs stocks during in the 1920'íes ...

Obviously - anybody who managed to pick the peak in 1929, went (short before) that day into cash and went some months later back into stocks, made big money. But what for the majority of people without a working crystal ball?

Anybody who kept their money throughout the 1920'íes in bonds was a big looser ...

1915-1921 was highly inflationary, in which period real stock returns were strongly negative. The 20's had low inflation.

Inflation not good for stocks... or bonds.

[bull....]

I guess time will tell whether it is stock investors or bond investors who are in lala land. Persistent Inflation will kill the value of bonds (it always did in the past), while stocks will survive even hyperinfaltion (they always did in the past) ...

Ah yes, but don't forget this time will be different - the bull is a bear ... though - he always was :);

more bad news out today

Inflation has so much strength and persistence that the RBNZ will likely need to keep raising interest rates despite softening house prices, ANZ economists say

https://www.interest.co.nz/property/114939/inflation-has-so-much-strength-and-persistence-rbnz-will-likely-need-keep-raising

wow bp better ditch those oca's lol with house prices falling retiree's wont be able to afford the units or apartments. might have to settle for fbu flatpacks

[Bobdn]

Yeah, high inflation is generally bad for stocks (e.g.s&p 500) and bonds. Worse for bonds, however. The only things that are really working well for me are my oil ETFs (OIH, XLE, and IXC) and Australian resources (mostly held by Smartshares ASR). In the 1970s of course only commodities, gold, and oil did really well. Real estate too I think.

I do hold paper gold via Perth Mint's PMGOLD fund and have been selling a little and reinvesting in Kernel; Simplicity and Superlife. Just a little mind, we might have a long way to go. Paper Gold is my cash allocation. I have next to zero cash. So far, gold is doing everything I've hoped it would do.

The rest of my portfolio, which is the whole world market, is tanking. The above just represents a tilt.

[Joshuatree]

Nearly all my equities are in NZ and aus except for a Canadian Goldie.My energy stocks,all established producers are booming,recent buy BHP (selling its energy portfolio to Woodside which I hold) going up and my gold producers doing great as well,finally . A great hedge and keeping the value of my portfolio stable.

[bull....]

US bonds rising strongly again today , i have the top of the range around 1.35 ...3-3.1 which has been the range pretty much since 2011. risk rising for stocks

lets not forget the looming food crisis coming

Fertilizer prices are at record highs. Here’s what that means for the global economy
https://www.cnbc.com/2022/03/22/fertilizer-prices-are-at-record-highs-heres-what-that-means.html

[JohnnyTheHorse]

US bonds rising strongly again today , i have the top of the range around 1.35 ...3-3.1 which has been the range pretty much since 2011. risk rising for stocks

lets not forget the looming food crisis coming

Fertilizer prices are at record highs. Here’s what that means for the global economy


https://www.cnbc.com/2022/03/22/fertilizer-prices-are-at-record-highs-heres-what-that-means.html

My shorts on bonds are flying :t_up:.

Bigger picture, this weekly bounce on SPY is large enough that we should now hold the lows in the short term. I mentioned previously that sentiment was way too bearish and hence we were due for a bounce to unwind overconfident bears. I still see the medium term outlook is that we set a monthly lower high and roll over (NZX last year is an example of what could happen, although I would think it'll be a bit faster as the NZX had the backdrop of a rising US market).

[Jerry]

How reliable do you feel paper gold is? One hears that the amount of gold backing the paper can be way less than 100%. My converse problem is I don't want little bits of metal to look after myself.

[BlackPeter]

How reliable do you feel paper gold is? One hears that the amount of gold backing the paper can be way less than 100%. My converse problem is I don't want little bits of metal to look after myself.

If I want to invest in gold I normally go for gold mining shares (of producing and well established mines) ... they go up and down with the gold price and are not more difficult to look after than other stocks.

Discl: holding OGC ...

[Bobdn]

Jesus, S&P500 just 3 per cent from all time highs now.

[Beagle]

I have a strong preference to read your comment without the blasphemy but yes the strength of the rebound in the S&P 500 is quite surprising especially in the context of the war in Ukraine continuing, much higher 10 year bond rates, very high inflation, very high oil prices and of course the well known intention of the US Federal Reserve to raise interest rates many times this year.

Maybe there are implications for some of our stocks that have been beaten down below their intrinsic value ?

[bohemian]

Jesus, S&P500 just 3 per cent from all time highs now. I also have a strong preference to read your comment without the blasphemy what does it do for you?

[Baa_Baa]

S&P500 just 3 per cent from all time highs now.

DOW is only 4.5% off ATH. Underlying seems to be boosted by the US Tech rebound, i.e. DOW/SP5 lagging Tech, however some cautions from the DOW Chart, this current short term uptrend has a falling volumes divergence and volumes below average, and MACD histogram turned over a few days ago. Positives are the daily busted up through 200 and 100 MA's today.

[JohnnyTheHorse]

Not entirely unsurprising as at the lows bearish sentiment was extreme. We are now seeing the unwinding of these short positions and FOMO return to the market. Long term shorts are scouting a good risk/reward entry playing off ATH's. I think the bigger picture of rising yields is too great for markets to overcome, but I don't expect us to crash down in the near term either. I'm basing my trading plans around trading in a range of the ATH and recent fear low for at least the next few months, with a bear breakdown later in the year.

One thing is for sure though... the NZX is a dog and has been gaining more and more dog status by the day.

[Bobdn]

@Beagle, @Bohemian, I'm a blasphemer, for sure. I don't want to deliberately offend you. Unfortunately, it's likely to come out again from time to time as it's my natural way of speaking and writing and I like it. No offence will be taken at all if you wish to block me. It's fine.

At the moment, I'm on a bit of a rough up and down DOC track (with a bit of 4g) - I have cursed and blasphemed a lot on this track. But I hear cars, so my knees are about to get relief.

@Baa baa. I still have a little dry powder but not much now, so I hope it holds. Oil dropping so much is a bit of a worry for my tilt.

[bull....]

Not entirely unsurprising as at the lows bearish sentiment was extreme. We are now seeing the unwinding of these short positions and FOMO return to the market. Long term shorts are scouting a good risk/reward entry playing off ATH's. I think the bigger picture of rising yields is too great for markets to overcome, but I don't expect us to crash down in the near term either. I'm basing my trading plans around trading in a range of the ATH and recent fear low for at least the next few months, with a bear breakdown later in the year.

One thing is for sure though... the NZX is a dog and has been gaining more and more dog status by the day.

dog of last yr and dog of this yr at this rate its performance over time might head it to dog of all time lol

[Bjauck]

dog of last yr and dog of this yr at this rate its performance over time might head it to dog of all time lol The NZX is tiny exchange. It just takes a couple of big companies (such as ATM or FBU etc.) to underperform and it effects the index. Besides, so many successful NZ companies end up taken over by foreign concerns or migrating from NZX to the ASX anyway. However NZ households have been/are encouraged to put much more of their investment into NZ residential housing and that has been a boomer over the years!

[bull....]

The NZX is tiny exchange. It just takes a couple of big companies (such as ATM or FBU etc.) to underperform and it effects the index. Besides, so many successful NZ companies end up taken over by foreign concerns or migrating from NZX to the ASX anyway. However NZ households have been/are encouraged to put much more of their investment into NZ residential housing and that has been a boomer over the years!

fundamentals , china and nz both worst markets to be in last yr and a bit and both struggling with economic problems.
NZ being like you say a large part of the economy reliant on housing for economic growth and maybe int investors are worried about how NZ will fare when its economy is so reliant on a open world for trade.
I see russia lavrov saying yesterday a bi polar world of trading blocks maybe what they are aiming for. how will nz fare under this senario china/russia block or us block ?

[Joshuatree]

dog of last yr and dog of this yr at this rate its performance over time might head it to dog of all time lol

NZ shares this year have outperformed
Emerging mkt shares
Europe
Japanese
World
USA
Aus and UK shares have outperformed us . All in the negative of course. source Bloomberg
We've had a long many year bull mkt,I for one am now set for an enjoyable retirement financially wise.

[Bjauck]

NZ shares this year have outperformed
Emerging mkt shares
Europe
Japanese
World
USA
Aus and UK shares have outperformed us . All in the negative of course. source Bloomberg
We've had a long many year bull mkt,I for one am now set for an enjoyable retirement financially wise. Yep. Those retiring now have had some very good years of surging asset values. The question is whether they should lock in the gains by switching to more conservative assets.

[BlackPeter]

fundamentals , china and nz both worst markets to be in last yr and a bit and both struggling with economic problems.
NZ being like you say a large part of the economy reliant on housing for economic growth and maybe int investors are worried about how NZ will fare when its economy is so reliant on a open world for trade.
I see russia lavrov saying yesterday a bi polar world of trading blocks maybe what they are aiming for. how will nz fare under this senario china/russia block or us block ?

I can see how Russia wants to trade with China. Not so sure, though whether China wants to continue its trade with Russia, if this means it can't trade anymore with the West.

Russia is these days a quite useless pariah state with plenty of (poorly maintained) nukes but very little economic power.

It clearly won't be Russia to decide about the future of world trade relationships. Prior to the sanctions they weighed in with half of the Italian GDP - and by now it will be much less. I doubt that China wants to paint itself into the Russian corner. China is already and wants to further grow as a global power house. This won't fit well together with taking a hospital pass and quaranteening with the sick Russian bear who is controlled by a madman.

[Bjauck]

I can see how Russia wants to trade with China. Not so sure, though whether China wants to continue its trade with Russia, if this means it can't trade anymore with the West.

Russia is these days a quite useless pariah state with plenty of (poorly maintained) nukes but very little economic power.

It clearly won't be Russia to decide about the future of world trade relationships. Prior to the sanctions they weighed in with half of the Italian GDP - and by now it will be much less. I doubt that China wants to paint itself into the Russian corner. China is already and wants to further grow as a global power house. This won't fit well together with taking a hospital pass and quaranteening with the sick Russian bear who is controlled by a madman.

It looks like Russia is trying to stand up to the recent sanctions and dictate payment terms of trade to Germany - the engine house of Europe. The gas supply is under threat. The LNG supplies from the USA will be too little too late? Russia has not yet lost the Economic Ukrainian War? When the two most important countries on the continent fall out, that is when the proverbial really starts to hit the fan!

https://www.bbc.com/news/live/world-europe-60923158

[bull....]

Russia says it's building a new "democratic world order" with China


https://www.cbsnews.com/news/russia-china-lavrov-visit-beijing-vladimir-putin-xi-jinping-new-world-order/

the real reasons for the war ?

[couta1]

Russia says it's building a new "democratic world order" with China


https://www.cbsnews.com/news/russia-china-lavrov-visit-beijing-vladimir-putin-xi-jinping-new-world-order/

the real reasons for the war ? Interesting, looks like a clash of 2 NWO's coming up in the future with the WEF/UN on one side and Russia/China on the other, both as evil as each other.

[Panda-NZ-]

Russia says it's building a new "democratic world order" with China


https://www.cbsnews.com/news/russia-china-lavrov-visit-beijing-vladimir-putin-xi-jinping-new-world-order/

the real reasons for the war ?

They wish.

As Germany once said of Austria-Hungary its like being "shacked to a corpse".

[BlackPeter]

It looks like Russia is trying to stand up to the recent sanctions and dictate payment terms of trade to Germany - the engine house of Europe. The gas supply is under threat. The LNG supplies from the USA will be too little too late? Russia has not yet lost the Economic Ukrainian War? When the two most important countries on the continent fall out, that is when the proverbial really starts to hit the fan!

https://www.bbc.com/news/live/world-europe-60923158

Well yes, I heard about Putins desire to break international contracts re payment of gas delivery as well. Obviously - he is a crook and a liar, so anything is possible.

However - listening yesterday evening (NZ time) to the German TV news (Tagesschau - 7 am edition) - they said that Putin called and told the German gas suppliers that they can continue to pay in Euros, as the contract between the Russian Gasprom and the German gas suppliers specifies.

I suppose this is more up to date news, it normally takes a bit to channel through to NZ, but who knows ... obviously - Putin is a crook and a liar, so I guess we will see what will happen.

I understand Germans prepared already for gas rationing - I don't think they are prepared to succumb to Putins black mail attempts.

[JBmurc]

https://qr.ae/pvKRE4

Russia’s financial war
The really important Russian war with the West is the financial war, which the western media never discusses.
Here are the developments:
Russia has told the EU nations that from April 1, it will only accept rubles for Russian natural gas;
The EU has said that they refuse to pay rubles, and that they will only pay in US$ and euros;
The Russians have said that they will not accept US$ and euros, because they could sanction Russia any time, in which case the US$ and euros Russia holds are worthless.
The US and UK have signed regulations not allowing Russian gold to be sold in US, UK gold exchanges.
Now, the last part is very interesting, because Shanghai has its gold exchange. Hmmm, are you thinking what I’m thinking?
Putin has done something else interesting, and he has announced that the Bank of Russia will buy gold. The gold can then be converted into rubles, which can then be used to buy natural gas.
The German government is in a very bad spot because its economy depends on Russian natural gas. If they break with the US, the US will be annoyed. If they obey the US, the German economy, which is a major global economy, will slide into a major recession.
What happens if Russia announces that it will also accept Indian rupees and Chinese yuan in payment for natural gas? Just no US$ and euros. Would the Europeans scramble to buy rupees and yuan? What happens if the Chinese say they don’t want US$ because the Chinese believe that the Americans are going to sanction China next?
That would be very interesting.
Let’s see who is going to be the fool on April Fool’s day.

[Panda-NZ-]

It's summer in europe soon. There's time to think it over.

[Bjauck]

Well yes, I heard about Putins desire to break international contracts re payment of gas delivery as well. Obviously - he is a crook and a liar, so anything is possible.

However - listening yesterday evening (NZ time) to the German TV news (Tagesschau - 7 am edition) - they said that Putin called and told the German gas suppliers that they can continue to pay in Euros, as the contract between the Russian Gasprom and the German gas suppliers specifies.

I suppose this is more up to date news, it normally takes a bit to channel through to NZ, but who knows ... obviously - Putin is a crook and a liar, so I guess we will see what will happen.

I understand Germans prepared already for gas rationing - I don't think they are prepared to succumb to Putins black mail attempts. it is certainly a volatile situation. I imagine the contract did not allow for the situation when the purchaser makes payment as per the contract but is also party to sanctions, imposed after the contract was signed, that affects and may affect what the supplier can subsequently do with that payment.

[bull....]

10-year Treasury yield hits high for the year after Brainard signals speedy Fed tightening
https://www.cnbc.com/2022/04/05/us-bonds-treasury-yields-rise-and-remain-inverted.html


day of reckoning coming ? maybe not for the blind

[winner69]

10-year Treasury yield hits high for the year after Brainard signals speedy Fed tightening
https://www.cnbc.com/2022/04/05/us-bonds-treasury-yields-rise-and-remain-inverted.html


day of reckoning coming ? maybe not for the blind


yield curve inversion seems tohave been averted .... that's good

[bull....]

yield curve inversion seems tohave been averted .... that's good

but liquidity tightening seems like it might be accelerated :scared:

[kiora]

Onwards & upwards?
https://www.newshub.co.nz/home/money/2022/04/mortgage-rates-might-have-already-peaked-in-new-zealand-expert-says.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+6 +April+2022

[Muse]

yield curve inversion seems tohave been averted .... that's good

yield curve has inverted in NZ - but *barely*
10 year swap rate now lower than the swaps for 3,4,5,& 7 year rates (ie everything between 2 and 10). none more than 10bps more than the 10 year rate.

[bull....]

Fed officials plan to shrink the balance sheet by $95 billion a month, meeting minutes indicate
https://www.cnbc.com/2022/04/06/fed-minutes-march-2022-meetings-.html

[bull....]

here's some more commentary on why the fed is not your friend now

If Stocks Don’t Fall, the Fed Needs to Force Them


Investors should pay closer attention to what Powell has said: Financial conditions need to tighten. If this doesn’t happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response. This would mean hiking the federal funds rate considerably higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower.

https://www.washingtonpost.com/business/if-stocks-dont-fall-the-fed-needs-to-force-them/2022/04/06/84c9322e-b599-11ec-8358-20aa16355fb4_story.html

[BlackPeter]

here's some more commentary on why the fed is not your friend now

If Stocks Don’t Fall, the Fed Needs to Force Them


Investors should pay closer attention to what Powell has said: Financial conditions need to tighten. If this doesn’t happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response. This would mean hiking the federal funds rate considerably higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower.

https://www.washingtonpost.com/business/if-stocks-dont-fall-the-fed-needs-to-force-them/2022/04/06/84c9322e-b599-11ec-8358-20aa16355fb4_story.html


... sounds to me like the fed is with the shorters ... i.e. it well might be your friend ;) ;

[bull....]

... sounds to me like the fed is with the shorters ... i.e. it well might be your friend ;) ;

yep makes perfect sense , force asset markets down or should i say all markets . people stop spending as the wealth effect dries up and bingo supply chains start to free up and some of the inflation goes away. hey dont need to increase rates as much.

im sure its more complicated than this with many more variables to complicate things so probably wont be this simple

[Rawz]

I listened to a podcast today and they discussed how the Fed is going to talk tough on rate hikes but not actually be tough with rate hikes.

Reason being is because the US needs inflation to help reduce their massive debt pile (relative to GDP and the tax take).

So could be a long period of high inflation and negative real rates.

Where is the best place to buy gold coins? Lol

[Muse]

I listened to a podcast today and they discussed how the Fed is going to talk tough on rate hikes but not actually be tough with rate hikes.

Reason being is because the US needs inflation to help reduce their massive debt pile (relative to GDP and the tax take).

So could be a long period of high inflation and negative real rates.

Where is the best place to buy gold coins? Lol

or gold infused bitcoin - i'd buy that...

[Rawz]

I think I need more debt :scared:

[alokdhir]

Developing countries use inflation to undermine their debt ..eg India ...regular inflation of over 6-7 % ...huge debt ..rates are always high but stock markets keep doing super well as GDP keeps growing in nominal and real terms ...growth takes precedence and value of historical debt keeps falling thus keeps becoming more manageable .

From stocks perspective ....Inflation helps increase eps thus SP ...also stocks benefit from replacement cost analysis ...only from DCF valuation angle higher rates hurt stocks ....but if companies can increase revenues , which is easier if prices going up , then nominal EPS goes up thus increasing SP .

Inflation is a tool to handle high debt but in developed world it hurts the poor people most thus a very unpopular and tough choice .

We do have problem of high debt in developed world now so Central Banks need to choose between growth or inflation and also debt Service burden of future ...which may become unsustainable at higher rates and longer term without growth and inflation

IMO ...path of growth and higher inflation then before is the easiest and soundest way out of huge Govt debts of developed world accumulated over last 10 years ...so super high rates which many are predicting to bring inflation down to previously normal levels may not happen .

Best approach , to stay in productive assets as they will also inflate with general economy while cash or similar assets will depreciate to accomodate huge historical debt servicing

Longer to medium term see no benefit of going out of stocks

[bull....]

US 10 YR hit new highs last night still see the move to 3 being the top of the chart range before consolidation i reckon.

wow NZ 10 yr at just under 3.5% as we type :scared: those bond proxy stocks will be paying less than holding a bond soon :scared::scared::eek2:

[Aaron]

US 10 YR hit new highs last night still see the move to 3 being the top of the chart range before consolidation i reckon.

wow NZ 10 yr at just under 3.5% as we type :scared: those bond proxy stocks will be paying less than holding a bond soon :scared::scared::eek2:

I guess bond proxies are the property companies and the power companies and utilities like Vector.

Am I reading this correctly the NZ Govt 10 yield has almost doubled over a year.

https://tradingeconomics.com/new-zealand/government-bond-yield#:~:text=The%20New%20Zealand%20Government%20B ond%2010Y%20is%20expected%20to%20trade,3.67%20in%2 012%20months%20time.

If asset prices really were the inverse of interest rates then the value of the bond proxies should have halved by now.

Is it because the interest rates were so ridiculously low, will the bond proxies get smashed once interest rates rise above dividend yields perhaps.

For a lot of the bond proxies like Vector debt at $2,838.3mill a 1% rise in funding equals $28.3 extra in interest payable. With a declared profit of $194.6mill that is a not too insignificant rise in one of its main costs. Imagine if rates were to rise by 3% Vectors profit might halve. Bond holders would still get paid but the dividend might be in danger.

I assume no one believes central banks will genuinely fight inflation with higher rates.

[Muse]

I guess bond proxies are the property companies and the power companies and utilities like Vector.

Am I reading this correctly the NZ Govt 10 yield has almost doubled over a year.

https://tradingeconomics.com/new-zealand/government-bond-yield#:~:text=The%20New%20Zealand%20Government%20B ond%2010Y%20is%20expected%20to%20trade,3.67%20in%2 012%20months%20time.

If asset prices really were the inverse of interest rates then the value of the bond proxies should have halved by now.

Is it because the interest rates were so ridiculously low, will the bond proxies get smashed once interest rates rise above dividend yields perhaps.

For a lot of the bond proxies like Vector debt at $2,838.3mill a 1% rise in funding equals $28.3 extra in interest payable. With a declared profit of $194.6mill that is a not too insignificant rise in one of its main costs. Imagine if rates were to rise by 3% Vectors profit might halve. Bond holders would still get paid but the dividend might be in danger.

I assume no one believes central banks will genuinely fight inflation with higher rates.

from the chart section of interest.co.nz which is an outstanding resource
https://www.interest.co.nz/charts/interest-rates/government-bond-rates

[Aaron]

from the chart section of interest.co.nz which is an outstanding resource
https://www.interest.co.nz/charts/interest-rates/government-bond-rates

Thanks for that, flicking through the different time periods the 1yr rate is interesting with people happy to lend for a year at 0% up to October 2021 now it is 2.5%. I guess the 0% might have been Orr buying govt bonds to suppress interest rates. Not sure that could be fake news but I understand central banks print money to buy govt bonds at low yields for the short term to influence rates in the long term.

Pretty extreme moves but not reflected on the NZX as yet. I don't think Adrian Orr has the courage to act and obviously I am not the only person who thinks that.

Either that and/or the financial advisors have sold the buy and hold for the long term narrative. They forget to mention their fees are also dependent on how much you have invested with them. They win up or down and only lose if you move money to the sidelines.

[Panda-NZ-]

I assume no one believes central banks will genuinely fight inflation with higher rates.

Should use the kiwisaver contribution rate instead.

More savings = less consumption = maybe lower inflation (?).

[Joshuatree]

Super bubble pop by Jeremy Grantham
https://www.youtube.com/watch?v=JlEGU2ypr1Q

[Aaron]

Super bubble pop by Jeremy Grantham
https://www.youtube.com/watch?v=JlEGU2ypr1Q

Even Jeremy admits he is usually a few years early.

Talk to clearasmud as he has a strong conviction on which year it all turns to custard and based on Jeremy's previous early calls he may be right. I guess that is why they say forecasting the future is as clear as mud.

[bull....]

I assume no one believes central banks will genuinely fight inflation with higher rates.

got to keep in the back of your mind its political now as biden is saying he wants inflation down.

anyway bonds hit new highs this cycle again last night ... still picking around 3% for current move

also keep your eye on the mens underwear index for recession signals :eek2:

[Aaron]

double posted sorry.

[Aaron]

also keep your eye on the mens underwear index for recession signals :eek2:

I assume this is how brown your undies are and how many times a day you need to wring them out when looking at a falling sharemarket.

[winner69]

Anyone's guess what the RB WILL do this week

The case that they should raise the OCR this time by 75 or even 100 bps is pretty strong. The RB has been behind the game from the start, (core) inflation is high & the real OCR is much lower now than pre-Covid.

But I reckon our friend Adrian will be wimpish and go for 25 bps

[Rawz]

Anyone's guess what the RB WILL do this week

The case that they should raise the OCR this time by 75 or even 100 bps is pretty strong. The RB has been behind the game from the start, (core) inflation is high & the real OCR is much lower now than pre-Covid.

But I reckon our friend Adrian will be wimpish and go for 25 bps

100bp would be an over-reaction and send us straight towards a hard landing

Lots of 25bp will give us a soft landing.

[Muse]

100bp would be an over-reaction and send us straight towards a hard landing

Lots of 25bp will give us a soft landing.

I'm all for two 50bps rises, this month and next, followed by 25bps rises thereafter. The RBNZ needs to show credibility that it will rein in inflation, rather than let it get entrenched and self fulfilling, requiring even greater rises later which will increase the odds & severity of a recession

If they go 25bps this week, they may still have to do two 50bps rate rises back to back, as inflation data is released. It's possible the next two inflation releases will be between 7 to 7.5%. We gotta clock this on the head now

[Rawz]

I'm all for two 50bps rises, this month and next, followed by 25bps rises thereafter. The RBNZ needs to show credibility that it will rein in inflation, rather than let it get entrenched and self fulfilling, requiring even greater rises later which will increase the odds & severity of a recession

If they go 25bps this week, they may still have to do two 50bps rate rises back to back, as inflation data is released. It's possible the next two inflation releases will be between 7 to 7.5%. We gotta clock this on the head now

Hmm a fine balancing act required.

I think the central banks around the world are going to talk much tougher than they act

[Muse]

Hmm a fine balancing act required.

I think the central banks around the world are going to talk much tougher than they act

I'm thankful we aren't as behind the curve as the americans !
the RBA a bunch of wet blankets too

I'm really enjoying podcasts by Larry Summers who I reckon has been spot on about inflation.

Got to keep entertained and occupied when the moose family is locked down & suffering from covid. Thankfully our symptoms are manageable, but being locked down for at least a week with hacking children isn't very pleasant.

[Rawz]

I'm thankful we aren't as behind the curve as the americans !
the RBA a bunch of wet blankets too

I'm really enjoying podcasts by Larry Summers who I reckon has been spot on about inflation.

Got to keep entertained and occupied when the moose family is locked down & suffering from covid. Thankfully our symptoms are manageable, but being locked down for at least a week with hacking children isn't very pleasant.

Guttered! Lucky it is manageable. Lockdowns with children is hard enough lol let alone them being sick.

Talking about podcasts, what is everyone's favorites. I listen to:

Macro Voices (best)
We Study Billionaires (very close second best)
The Acquires Podcast (bit more relaxed)
Motley Fool Money (constantly reinforces simple investment themes)
Stephanomics (good but short)
Millennial Investing (hit and miss)

any good ones i am missing? I listen via spotify

[Muse]

Guttered! Lucky it is manageable. Lockdowns with children is hard enough lol let alone them being sick.

Talking about podcasts, what is everyone's favorites. I listen to:

Macro Voices (best)
We Study Billionaires (very close second best)
The Acquires Podcast (bit more relaxed)
Motley Fool Money (constantly reinforces simple investment themes)
Stephanomics (good but short)
Millennial Investing (hit and miss)

any good ones i am missing? I listen via spotify

nice one i'll check them out

[winner69]

Hmm a fine balancing act required.

I think the central banks around the world are going to talk much tougher than they act

some say no increase in OCR because the outlook is not good and most people are kind of broke and hungry and many sleeping rough.

It’s sad how this country has got itself into such a state.

[JohnnyTheHorse]

some say no increase in OCR because the outlook is not good and most people are kind of broke and hungry and many sleeping rough.

It’s sad how this country has got itself into such a state.

Unfortunately central banks have pushed us into this corner over many years. There is no longer a 'good' option, it's a matter of guiding us down the least worse path. The track record of central banks suggests they will not achieve this very well.

[bull....]

probably doesnt matter what the RBNZ does this week , the banks are doing the tightening.
It will be more interesting how much more the banks jack mortgage rates higher after the RBNZ announcement. they will cause the recession not the RBNZ

[Rawz]

some say no increase in OCR because the outlook is not good and most people are kind of broke and hungry and many sleeping rough.

It’s sad how this country has got itself into such a state.

The biggest issue with this country is too much of a % of working peoples pay packet goes towards housing (rent or mortgage). I am very fortunate to have worked myself up the ladder enough to earn 3x the medium nz wage in my early 30s and wonder how on earth some people in real jobs like truck drivers or midwives do it.

Im not calling for a housing collapse. We need higher paying industry in this country. We need to strive to be the silicon valley of the south pacific. Luxon talks about this type of economy. There is hope w69

[Muse]

in a round about way higher fuel prices do some of the work of higher interest rates. one could argue in a heartless sort of way that in aggregate the country would have been better off not slashing the taxes on fuel. obviously that would never fly. but higher interest rates later are equally challenging & give more political cover

[Aaron]

some say no increase in OCR because the outlook is not good and most people are kind of broke and hungry and many sleeping rough.

It’s sad how this country has got itself into such a state.

Who is suggesting that? Property investors? real estate agents?, bankers? Home Owners? Adrian Orr?

I have read inflation is bit like a regressive tax so I doubt any rough sleepers are overly concerned by any increase in the OCR.

[bull....]

Latest Kiwibank household spending data shows that the March quarter spending was 'especially weak'

https://www.interest.co.nz/business/115291/latest-kiwibank-household-spending-data-shows-march-quarter-spending-was-especially

ASB economists say last week's 'big lift' in wholesale interest rates added to the upside pressure on mortgage rates

https://www.interest.co.nz/business/115293/asb-economists-say-last-weeks-big-lift-wholesale-interest-rates-added-upside

just what i was thinking earlier today about banks jacking mtge rates thru the roof will KO the economy when combined with high inflation.

of course the NZX is still in LALA land

[Rawz]

No need to raise rates when consumer spending is falling off a cliff

this from Tony Alexander:

Right at the start of this year the willingness of Kiwis to spend on goods, services, and assets over the coming 3-6 months took a substantial step down. Our latest survey shows that spending willingness remains weak, and this has important implications for monetary policy. It tells us that the weakness in household spending which the Reserve Bank wants in response to higher mortgage rates is already happening. This does not mean the official cash rate won’t be increased through 2022. But it does mean the heights it gets to are likely to be lower than some have recently been thinking solely on the basis of this year’s surge in inflation.

[JohnnyTheHorse]

Not really the banks jacking rates up though is it... it's driven by bond markets which are fairly free functioning. Haven't checked in awhile but I think their NIM's are fairly low at current spreads.

[Muse]

Latest Kiwibank household spending data shows that the March quarter spending was 'especially weak'

https://www.interest.co.nz/business/115291/latest-kiwibank-household-spending-data-shows-march-quarter-spending-was-especially

ASB economists say last week's 'big lift' in wholesale interest rates added to the upside pressure on mortgage rates

https://www.interest.co.nz/business/115293/asb-economists-say-last-weeks-big-lift-wholesale-interest-rates-added-upside

just what i was thinking earlier today about banks jacking mtge rates thru the roof will KO the economy when combined with high inflation.

of course the NZX is still in LALA land


No need to raise rates when consumer spending is falling off a cliff

this from Tony Alexander:

Right at the start of this year the willingness of Kiwis to spend on goods, services, and assets over the coming 3-6 months took a substantial step down. Our latest survey shows that spending willingness remains weak, and this has important implications for monetary policy. It tells us that the weakness in household spending which the Reserve Bank wants in response to higher mortgage rates is already happening. This does not mean the official cash rate won’t be increased through 2022. But it does mean the heights it gets to are likely to be lower than some have recently been thinking solely on the basis of this year’s surge in inflation.

Interesting.

These would give the RBNZ an easy out from doing a 50bps rise.

Might prefer to take the path of least resistance.

Prefer them to raise 50bps tho…with all time low unemployment that is forecast by trading banks to keep declining this and next quarter, things are very tight. Id be more worried about wage inflation spiralling out of control in the future than taking comfort in weak consumer spending.

[Leemsip]

I read a while ago, in easier times, that the bond market/interest rates are like a horse tied to a post, with the "post" being the reserve bank rate. The post will normally keep the horse nearby, but when something spooks the horse it may decide to bolt off and it rips the post out of the ground and runs off.

I think Orr needs to move 0.5 this time, in order to get some credibility with inflation, also need to get the reserve bank rate closer to the market rate so as to re-attach it to the post again. Hey market, we are in control remember, this is what the interest rate should be etc etc.

Feeling pretty doomy about the share market in this environment. NZX doesnt have anything I fancy at anything like a reasonable price, inflation and jacking interest rates is going to hurt consumers, businesses and everyone across the board. Im easing even further out of the market into cash, where Im only loosing 7% per year to inflation......

[Leemsip]

Not sure if this attachment will work

[Monarch]

I read a while ago, in easier times, that the bond market/interest rates are like a horse tied to a post, with the "post" being the reserve bank rate. The post will normally keep the horse nearby, but when something spooks the horse it may decide to bolt off and it rips the post out of the ground and runs off.

I think Orr needs to move 0.5 this time, in order to get some credibility with inflation, also need to get the reserve bank rate closer to the market rate so as to re-attach it to the post again. Hey market, we are in control remember, this is what the interest rate should be etc etc.

Feeling pretty doomy about the share market in this environment. NZX doesnt have anything I fancy at anything like a reasonable price, inflation and jacking interest rates is going to hurt consumers, businesses and everyone across the board. Im easing even further out of the market into cash, where Im only loosing 7% per year to inflation......

I've never understood this saying. Aren't you only loosing 7% per year to inflation if you intend to spend the money in the near future on goods and services. If your intending to invest the money at a later date isn't the inflation/deflation of stock prices the relevant metric?

[nztx]

I've never understood this saying. Aren't you only loosing 7% per year to inflation if you intend to spend the money in the near future on goods and services. If your intending to invest the money at a later date isn't the inflation/deflation of stock prices the relevant metric?


What's the true rate of underlying Loss of Real Value running at ? ;)

(ie the Hidden sneaky Govt initiated inflation which is invariably never officially reported)

Every buck dished out in Covid Support and likes increasing money supply for similar
amount of real goods in the Goldfish bowl will be creating further 'Artificial Inflation'.

Having the readies realised stacked away in Ca$h or in Low Pittance Interest accounts
wont do a heck of a lot to protect against large scale Loss of Real Spending Power
will it ? ;)

[bull....]

What's the true rate of underlying Loss of Real Value running at ? ;)

(ie the Hidden sneaky Govt initiated inflation which is invariably never officially reported)

Every buck dished out in Covid Support and likes increasing money supply for similar
amount of real goods in the Goldfish bowl will be creating further 'Artificial Inflation'.

Having the readies realised stacked away in Ca$h or in Low Pittance Interest accounts
wont do a heck of a lot to protect against large scale Loss of Real Spending Power
will it ? ;)

losing 7% due to inflation by having some cash in my portfolio sounds better than losing the 7% + ( being the amount equities might fall in your portfolio + inflation ) and then ill have the cash to pick up the bargains later maybe

[Leemsip]

losing 7% due to inflation by having some cash in my portfolio sounds better than losing the 7% + ( being the amount equities might fall in your portfolio + inflation ) and then ill have the cash to pick up the bargains later maybe

Anyone want to talk what % cash they are right now? 70%ish cash for me. Tough choices here!

[nztx]

losing 7% due to inflation by having some cash in my portfolio sounds better than losing the 7% + ( being the amount equities might fall in your portfolio + inflation ) and then ill have the cash to pick up the bargains later maybe


I'm really referring to the loss in value of the fiat over past 2 years which is significant - as in at least 50%.
Property and some equities with increased pricing since, record the loss in value - by increased values
higher prices.
I don't like red ink, but that said have completely turned accumulated Loss to Surplus and not a small one either.
And not on NZX either in recent times.
There are markets & sectors out there still with good prospects, if you know what to look for & take onboard the risk :)

[bull....]

Investors going to cash: In Q3, SelfWealth clients responded to the inflation outlook,interest rate speculation, and geopolitical tensions by switching out of equities and intocash, leading to the record cash balance on the platform and lower trading activity

heres asx announcement from selfwealth aussie stock broker

https://www.asx.com.au/asxpdf/20220412/pdf/457y5krkxdyx8q.pdf


so who is buying ? kiwisaver funds etc ? lol

[bull....]

There are markets & sectors out there still with good prospects, if you know what to look for & take onboard the risk :)

i agree. long may it last

[causecelebre]

At the moment I have a higher proportion in cash earning 8% staking Stablecoins. Of course there's some counterparty risk but its spread over staking platforms

[GOAT]

Anyone want to talk what % cash they are right now? 70%ish cash for me. Tough choices here!

Same here. I'm at 70% cash and feel ok with my position.

To me it feels like the actions taken in 2020 to help the economy recover only delayed the inevitable.

[winner69]

NZIER Quarterly Business Opinion and response to pricing intentions sys Adrian needs to increase OCR by a minimum of 50 bps tomorrow

But he want and he'll get further behind the curve and go down in history as te worst Governor we've had ..... even surpassing Wheller

[BlackPeter]

NZIER Quarterly Business Opinion and response to pricing intentions sys Adrian needs to increase OCR by a minimum of 50 bps tomorrow

But he want and he'll get further behind the curve and go down in history as te worst Governor we've had ..... even surpassing Wheller

Well, he probably learned in management training that charts always should start at left bottom and move to the top right. Based on this training all looks good - no governor before him managed to create such a beautiful chart.

But - to be fair ... it is really easy to mock anybody in this positon, and there are probably far more different and not alignable views around what the RBNZ should do in the current situation than there are readers of this thread.

Given that his objective is not just keeping the rate of inflation in a predetermined window despite him having no control over imported inflation (which is the lions share of the current inflation) ... he has got as well the additional task to keep unemployment numbers low (which is mutually exclusive to objective A).

I think the worst you can say about Orr (or anybody else in this position) ... they must be pretty stupid, otherwise they would not have accepted their job.

Ouch - this is concerning, isn't it?

[winner69]

BP mentions 'imported inflation' ..... hmmm ....suppose that is what some want us all to believe ....and it says so in the media so must be true

[BlackPeter]

BP mentions 'imported inflation' ..... hmmm ....suppose that is what some want us all to believe ....and it says so in the media so must be true

Given that most of the stuff we consume is either produced overseas (like electronics, cars, fuel, 95%+ of our clothes) - or subject to world market prices (like milk, butter, vegetables, meat, ...) am I not sure why you put the "imported inflation" into the realm of faith (believe)?

I would have thought that one can see that just by looking at the facts ...

[Panda-NZ-]

BP mentions 'imported inflation' ..... hmmm ....suppose that is what some want us all to believe ....and it says so in the media so must be true

Every country in the world has it so it must be global in nature.

NZ must accept world prices for food so when it goes up it goes up locally (free market, sad for the poor , though).

[GOAT]

RBNZ made a decision to introduce LSAP programme and extremely low interest rates which are massive contributing factors.

There's a reason why the Chief Economist at RBNZ decided to resign at convenient time - right when the media started talking about inflation. The same guy who called economic easing as "business as usual".

[bull....]

Consumer prices rose 8.5% in March, slightly hotter than expected and the highest since 1981
https://www.cnbc.com/2022/04/12/consumer-prices-rose-8point5percent-in-march-slightly-hotter-than-expected.html


markets were up after the announcement but looks like most people just used that as a selling opp as now they are in the red

[Bjauck]

BP mentions 'imported inflation' ..... hmmm ....suppose that is what some want us all to believe ....and it says so in the media so must be true
So much of what we need is produced overseas - computers, cars, machinery etc. Sure NZ policies have encouraged investment in land and hence land price inflation, but much of that asset inflation is kept out of the CPI index.

[percy]

So much of what we need is produced overseas - computers, cars, machinery etc. Sure NZ policies have encouraged investment in land and hence land price inflation, but much of that asset inflation is kept out of the CPI index.

What is disappointing is the lack of imported labour,which means our agriculture sector can not achieve full production.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/cLFycRk3lGfkcTfJ1eOFxQ/BRCcpAWNQoqfxv892BwyT3mQSame goes for apples and Kiwi Fruit,

[Aaron]

What is disappointing is the lack of imported labour,which means our agriculture sector can not achieve full production.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/cLFycRk3lGfkcTfJ1eOFxQ/BRCcpAWNQoqfxv892BwyT3mQSame goes for apples and Kiwi Fruit,

Maybe running the economy to hot for too long creates labour shortages.

Re BPs comments I am sure plenty of the inflation is home grown as well as imported. RBNZ is not the worst money printer in the world but their balance sheet expanded pretty significantly in response to the pandemic.

Inflation is always and everywhere a monetary phenomenon, at least it appears to be as inflation has taken off after the biggest money printing binge in history.

[iceman]

What is disappointing is the lack of imported labour,which means our agriculture sector can not achieve full production.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/cLFycRk3lGfkcTfJ1eOFxQ/BRCcpAWNQoqfxv892BwyT3mQSame goes for apples and Kiwi Fruit,

Totally agree. The out of date controls of letting temporary workers into the country to boost the industries that you mention, that we so desperately need to keep the country going and making its way in the World, make no sense. They are creating enormous stress on industry leaders that have enough on their plates without homemade problems that achieve absolutely no benefit. Just bureaucracy gone completely mad.

[winner69]

NZ pretty slack when it comes to productivity to start with

As a commentator pointed out the day both of countries on chart are small, remote, heavily reliant on natural resources:
Two countries: 1 success story, 1 failure

[BlackPeter]

NZ pretty slack when it comes to productivity to start with

As a commentator pointed out the day both of countries on chart are small, remote, heavily reliant on natural resources:
Two countries: 1 success story, 1 failure

Well, yes - but lets stay with the lingo, please: Let's call it a two horse race with one of the horses ending up second last and the other one on a reputable second place :p - and hey, we always can claim the better climate;

But hey, apart from semantics ... one of our problems is that we always try to just work harder (or force cheap labour to do it for us) instead of working smarter. No surprise the outcome is not smart either ;) ;

[Muse]

NZ pretty slack when it comes to productivity to start with

As a commentator pointed out the day both of countries on chart are small, remote, heavily reliant on natural resources:
Two countries: 1 success story, 1 failure

Good old NZ. An economy that is based on our housing market, with a few bits and bobs tacked on the side. And agree with (part) of BP's statement - we try to compensate by working harder & longer

[iceman]

NZ pretty slack when it comes to productivity to start with

As a commentator pointed out the day both of countries on chart are small, remote, heavily reliant on natural resources:
Two countries: 1 success story, 1 failure

The stark difference as I see it is that Iceland has leveraged their knowledge in primary industries, particularly fishing, fish production, geothermal energy and hydro energy, to build "best of breed" technology companies that have come up with clever solutions making them some of the World's biggest in their small specialists fields. These technology companies have been able to grow because the Icelandic primary industry companies themselves have encouraged the development and are always the first to implement the new technology. Like the fish factory I visited 3 years ago that used to process 300 tonnes per day with 180 people, running 3 x 8 hour shifts.
Today they process 2,000 tonnes with 30 people, all technicians.
I took some of these guys around NZ fish factories in 2019 and they were simply flabbergasted. One of them told me afterwards that most of the processing facilities would never even get a processing licence under European regulations.

Why does NZ not have lots of leading technology companies grown out of our primary industries. Of course we have a few shining examples like Gallagher's, (dare I say it) ATM and a few others that are World leaders in their field, but far fewer than we should.
The No 8 wire is not always enough :p

[BlackPeter]

The stark difference as I see it is that Iceland has leveraged their knowledge in primary industries, particularly fishing, fish production, geothermal energy and hydro energy, to build "best of breed" technology companies that have come up with clever solutions making them some of the World's biggest in their small specialists fields. These technology companies have been able to grow because the Icelandic primary industry companies themselves have encouraged the development and are always the first to implement the new technology. Like the fish factory I visited 3 years ago that used to process 300 tonnes per day with 180 people, running 3 x 8 hour shifts.
Today they process 2,000 tonnes with 30 people, all technicians.
I took some of these guys around NZ fish factories in 2019 and they were simply flabbergasted. One of them told me afterwards that most of the processing facilities would never even get a processing licence under European regulations.

Why does NZ not have lots of leading technology companies grown out of our primary industries. Of course we have a few shining example like Gallaghers, dear I say it ATM and a few others that are World leaders in their field, but far fewer than we should.
The No 8 wire is not always enough :p

You mention in your post one of the big differences between Iceland and NZ: 8 hour shifts!

In many primary industry jobs in NZ 12 hour shifts still seem to be the standard - and it is not unheard of that companies insist on people working double shifts! I do know some people to whom this happened.

Our working conditions in the primary industy are often back breaking - and no way for the respective workers to get a job and a life. Forget a family life if you have to slave in one of these jobs. This obviously makes it difficult for the companies to find willing workers (but they are not smart enough to introduce more humane working conditions), and it makes as well sure that the workers they find are less effective than they could be. Only a braindead manager would ask a worker to double up on a 12 hour shift (resulting in low productivity and high accident rates) ... and we do have too many of these managers around.

[Waltzing]

Send that chart to the FM Winner().

Harass the powers that think they know best.

The clever will leave for places where they achieve their full potential.

[winner69]

Technology has had govt focus for many years …make NZ a tech hub …..grow tech related exports …..work smarter etc etc etc

In that context I find chart like this interesting …a few years old but I’m sure an updated one would show the downtrend continuing



In

[Hoop]

Beware.. Hoops Wednesday morning rant below:

To me it feels like... Job Time = 70+% spent talking/writing about it (ticking all the over-regulation boxes) and 30-% doing the actual job.

Actually..Organisations managing these regulated environments are parasitic in nature and are a cost to industry with little to no reward..The more regulation introduced the more cost to industry, often not boosting production..this puts pressure on managing other costs and expenditure, unfortunately one being wages/salaries.

Another parasitic activity is "middle-men" activity.
The government is particularly good at this via taxes..Take away money only to redistribute it somewhere else (and the expense to do this)..In theory this is sought to be a beneficial practice, but sometimes there are knee-jerked taxes which are acted upon to gain political "brownie points" to satisfy the general public's moral opinion and to quiet general unrest...However some can be harmful in the longer term, for example, taking money away from an overly efficient production sector and redistributing it back into a struggling non-productive sector.

As we can see there are many moving parts within the system..Just to say we are going to regulate here and regulate there, or, lets lift the minimum wage (through more regulation) is naive thinking and will not help raise production efficiency. ..

The solution is complex and made worse by the ingrained culture and mindsets of that Country's population...Greece during it's recent very long Depression is a good example.

For now, the best solution is: 1..To slowly alter the masses mindset via media and financial handouts (this is happening and many don't like it) 2.. reduce the amount of regulation. cut back on outdated regulations and those which conflict with other regulations within the overall system thus creating a "less talk more do" working environment..The Government has started doing this, the property sector springs to mind..However the complexity of the problem could be beyond many at the present time..More advanced AI technology may be needed (enhanced system modelings) and for us humans to have faith in accepting these system models outcomes..

Models have been around for a while now and improving all the time but as we can see, so far the Public's faith and understanding in modeling is not that great....weather forecasting and Covid are 2 that spring to my mind..

That enough from me for now ...time to stop this unproductive writing on the forums, get off my bottom and do some productive work.

[bull....]

Highest annual food price increase in more than a decade

Food prices jumped 7.6 per cent last month compared with March 2021, Stats NZ said on Wednesday.

https://www.stuff.co.nz/business/128352455/highest-annual-food-price-increase-in-more-than-a-decade


wait till next yr :scared:

[dobby41]

NZ pretty slack when it comes to productivity to start with

As a commentator pointed out the day both of countries on chart are small, remote, heavily reliant on natural resources:
Two countries: 1 success story, 1 failure

Seems to me to be a failure of capitalism really.
Cheap labour beats machine and investment.

[Ggcc]

Highest annual food price increase in more than a decade

Food prices jumped 7.6 per cent last month compared with March 2021, Stats NZ said on Wednesday.

https://www.stuff.co.nz/business/128352455/highest-annual-food-price-increase-in-more-than-a-decade


wait till next yr :scared:

It will be higher. I’ve heard some chicken products have increased 10-12% as of 1st April and after that packaging has risen over 100% in a year. At some stage we might see stuff with less packaging around it as they can’t source it. Paper apparently takes 7 months to get here so expect at some stage your shark and taties to get wrapped in something else way more expensive and passed onto consumers.

[Ggcc]

Seems to me to be a failure of capitalism really.
Cheap labour beats machine and investment.

We are becoming too interested in buying stuff from overseas at a cheaper rate. You can buy a commercial fridge made overseas for approximately $3-4000 and one made in nz for approximately $6-7000. Which fridge would you buy as a business when they both last about as long as each other? Now that covid has hit we see the need to return to manufacturing and possibly just all paying more for our stuff.

[Muse]

10 minutes before OCR announcements. Why do I have this feeling we will only get a 25bps hike (which would be a mistake IMO)

[Muse]

Up she goes - a 50 bps hike!

[winner69]

Up she goes - a 50 bps hike!

....wow ....some must have go to him

Wonder what the words will say ..... especially the hidden meanings etc

[winner69]

Up she goes - a 50 bps hike!

...means Govt has to cut back on most of it's 'discretionary' spending (a lot of it under the guise of covid recovery) or else more pain that there needs to be ....but Robertson wont see it that way because the economy is in good shape eh ...and I still have this rather full fiscal envelope

[bull....]

It will be higher. I’ve heard some chicken products have increased 10-12% as of 1st April and after that packaging has risen over 100% in a year. At some stage we might see stuff with less packaging around it as they can’t source it. Paper apparently takes 7 months to get here so expect at some stage your shark and taties to get wrapped in something else way more expensive and passed onto consumers.

the govt panicking now on the data release

In what looked like a move to pre-empt any criticism, the Government quickly issued a statement on the latest food prices. And Commerce and Consumer Affairs Minister David Clark said the Government was "committed to taking action to pave the way for additional players to enter the New Zealand grocery market in order to increase competition".

https://www.interest.co.nz/personal-finance/115333/statistics-new-zealand-says-76-annual-hike-food-prices-biggest-2011-and-was

as usual all talk no action this govt.

[Panda-NZ-]

Beware.. Hoops Wednesday morning rant below:

To me it feels like... Job Time = 70+% spent talking/writing about it (ticking all the over-regulation boxes) and 30-% doing the actual job.



Try working with the EU (both inside and outside of it) and some industries in the US (with their ancient regulations not updated in 100 years).

[iceman]

Seems to me to be a failure of capitalism really.
Cheap labour beats machine and investment.

HAHAHA. The "success" in winner's example is much more capitalist and invests much more in machines and technology. The other big difference is the level of education, sadly.
Maybe NZ is failing on this front because of too much Government intervention and heavy regulatory burden and maybe, just maybe, we need to stop all the BS in the education system and get back to basics !!

[Panda-NZ-]

The first world alternatives to NZ are Australia, the EU, and US.

Each brings with it lots more regulation.

[iceman]

the govt panicking now on the data release

In what looked like a move to pre-empt any criticism, the Government quickly issued a statement on the latest food prices. And Commerce and Consumer Affairs Minister David Clark said the Government was "committed to taking action to pave the way for additional players to enter the New Zealand grocery market in order to increase competition".

https://www.interest.co.nz/personal-finance/115333/statistics-new-zealand-says-76-annual-hike-food-prices-biggest-2011-and-was

as usual all talk no action this govt.

Even more "coincidental" was the announcement of the change in this ridiculous traffic light system on the morning of the OCR announcement. Sadly the Government doesn't realise how stupid they look around the World, to be still be talking about **** like traffic light systems for COVID. Once again a year or so behind.

[winner69]

I see the RBNZ gurus mentioned that domestic factors have had an impact on inflation

Higher domestic inflation was seen as due to “both international and domestic factors”, including commodity prices and capacity pressures.

[bull....]

Even more "coincidental" was the announcement of the change in this ridiculous traffic light system on the morning of the OCR announcement. Sadly the Government doesn't realise how stupid they look around the World, to be still be talking about **** like traffic light systems for COVID. Once again a year or so behind.

lol amazing how quick govt's move when poll ratings decline.

[Waltzing]

Amazing that the population probably has no idea what light is on or off.. and no longer cares.

[dobby41]

lol amazing how quick govt's move when poll ratings decline.

You're suggesting that there is no health reason for the setting despite some health commentators saying that it should have stayed red?

[Joshuatree]

Yeah ,shallow and political.Check the omicron case numbers and graph.And who gives a stuff what other countries are doing ,we are all at different covid progress points.

[Aaron]

I see the RBNZ gurus mentioned that domestic factors have had an impact on inflation

Higher domestic inflation was seen as due to “both international and domestic factors”, including commodity prices and capacity pressures.

Any reason they can't just say we had the courage to act and cut the OCR .75% to .25% and we printed heaps of money and blew up the housing market, maybe this has flowed through to the wider economy, which possibly may have played a "bit part" in the inflation we are seeing.

[moka]

You mention in your post one of the big differences between Iceland and NZ: 8 hour shifts!

In many primary industry jobs in NZ 12 hour shifts still seem to be the standard - and it is not unheard of that companies insist on people working double shifts! I do know some people to whom this happened.

Our working conditions in the primary industy are often back breaking - and no way for the respective workers to get a job and a life. Forget a family life if you have to slave in one of these jobs. This obviously makes it difficult for the companies to find willing workers (but they are not smart enough to introduce more humane working conditions), and it makes as well sure that the workers they find are less effective than they could be. Only a braindead manager would ask a worker to double up on a 12 hour shift (resulting in low productivity and high accident rates) ... and we do have too many of these managers around.Quite true BP longer hours don't help productivity as this article shows.
https://www.bbc.com/news/business-57724779
(https://www.bbc.com/news/business-57724779)
Four-day week 'an overwhelming success' in Iceland
Trials of a four-day week in Iceland were an "overwhelming success" and led to many workers moving to shorter hours, researchers have said.
The trials, in which workers were paid the same amount for shorter hours, took place between 2015 and 2019.
Productivity remained the same or improved in the majority of workplaces, researchers said.
Many of them moved from a 40 hour week to a 35 or 36 hour week,

[iceman]

Quite true BP longer hours don't help productivity as this article shows.
https://www.bbc.com/news/business-57724779
(https://www.bbc.com/news/business-57724779)
Four-day week 'an overwhelming success' in Iceland
Trials of a four-day week in Iceland were an "overwhelming success" and led to many workers moving to shorter hours, researchers have said.
The trials, in which workers were paid the same amount for shorter hours, took place between 2015 and 2019.
Productivity remained the same or improved in the majority of workplaces, researchers said.
Many of them moved from a 40 hour week to a 35 or 36 hour week,

This article doesn't really tell the whole story. The trial was for Government workers only and has not been implemented in private businesses. But a 36 hour working week is now the norm and after that people get overtime, in most agreements.
But it is true that productivity and real wage increases (i.e. above inflation) have been happening steadily for several years now pretty much across the board for most workers. This has been achieved through a pact signed a few years ago by all major unions, employer's associations and central Government (in the form of lowering tax rates and elimination of many fees & charges)

[iceman]

Wouldn't let me edit the above post to add this link so sorry for it being in a separate post. But it gives more context to it
https://icelandmonitor.mbl.is/news/politics_and_society/2021/10/29/wages_in_iceland_second_highest/

[Muse]

REINZ house price index out this morning. House prices down 2.1% month on month. Wellington took the biggest hit. Page 6 has the summary table.

https://www.reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Residential/03%20-%20March/REINZ%20Monthly%20HPI%20Report%20-%20March%202022.pdf

[bull....]

BNZ, ANZ, ASB move to raise interest rates after official cash rate hike

https://www.stuff.co.nz/business/money/300565643/bnz-anz-asb-move-to-raise-interest-rates-after-official-cash-rate-hike

when those 1 yr fixed start rolling off that were fixed in the low 2s thats going to put a big brake on the economy if mtges keep on going up as the banks suggest they will

[stoploss]

BNZ, ANZ, ASB move to raise interest rates after official cash rate hike

https://www.stuff.co.nz/business/money/300565643/bnz-anz-asb-move-to-raise-interest-rates-after-official-cash-rate-hike

when those 1 yr fixed start rolling off that were fixed in the low 2s thats going to put a big brake on the economy if mtges keep on going up as the banks suggest they will
ANZ Put their rates up 35/40 points yesterday . ASB & Westpac have left them today and only put up the floating rates .
Not a good look for ANZ , 2 year swap rate went 15 points lower after the OCR hike ......

[winner69]

BNZ, ANZ, ASB move to raise interest rates after official cash rate hike

https://www.stuff.co.nz/business/money/300565643/bnz-anz-asb-move-to-raise-interest-rates-after-official-cash-rate-hike

when those 1 yr fixed start rolling off that were fixed in the low 2s thats going to put a big brake on the economy if mtges keep on going up as the banks suggest they will

Jeez bull. ….that means those on the low 2’s now when rolled over above 5% could be facing interest payments doubling ….ouch

[winner69]

Jenny Ruth always a good read

She flabbergasted Orr didn’t mention China in his OCR update

Seems NZ economy heading to really bad times

https://businessdesk.co.nz/article/opinion/where-was-china-in-the-reserve-banks-decision

Probably paywalled but you clever goes possibly know a way around that;)

[Muse]

Jenny Ruth always a good read

She flabbergasted Orr didn’t mention China in his OCR update

Seems NZ economy heading to really bad times

https://businessdesk.co.nz/article/opinion/where-was-china-in-the-reserve-banks-decision

Probably paywalled but you clever goes possibly know a way around that;)

Lol sadly that one is rock solid. As with the herald and nbr. Actually there used to be a way you could inspect and view the source of the herald, deleting out unsubscribed and typing in subscribed and reloading but they fixed that years ago. Who has time for that anyway

[winner69]

Phew, the relief .."CPI didn’t reach 7%

[Muse]

Jeesh inflation is really out of hand

But thats just my 3.5 cents

[winner69]

For those who've read in the media inflation is all imported and nothing to do with domestic stuff -- Hairdressing (essentially non-tradable and not imported) shows a 5.6% annual increase .....many more examples like that

[BlackPeter]

For those who've read in the media inflation is all imported and nothing to do with domestic stuff -- Hairdressing (essentially non-tradable and not imported) shows a 5.6% annual increase .....many more examples like that

Isn't this a bit simplified?

Last time I checked: hairdressers do need to eat, i.e. buy food (which is dependent on the world market prices). Most will need to dress themselves - and clothes are all imported. They need to drive a car to work (i.e. buy petrol, which is imported). They need to pay rent which is related to house prices ... and while houses are local, one of the reasons house prices are so high is that building materials (many imported or dependant on world market prices) are in the stratosphere. Which sort of means - if they rise their prices (below the average anyway), they do that because they need to survive. Is this home made inflation?

But hey - I don't think that all inflation is imported, but neither is all inflation home made.

And obviously - any attempt to reduce the home made share of the inflation does have a sting in its tail. Lower home made inflation is equivalent to higher unemployment and lower economic growth - we can't have it both ways.

So - why does it matter anyway how much of the inflation is imported?

[winner69]

Isn't this a bit simplified?

Last time I checked: hairdressers do need to eat, i.e. buy food (which is dependent on the world market prices). Most will need to dress themselves - and clothes are all imported. They need to drive a car to work (i.e. buy petrol, which is imported). They need to pay rent which is related to house prices ... and while houses are local, one of the reasons house prices are so high is that building materials (many imported or dependant on world market prices) are in the stratosphere. Which sort of means - if they rise their prices (below the average anyway), they do that because they need to survive. Is this home made inflation?

But hey - I don't think that all inflation is imported, but neither is all inflation home made.

And obviously - any attempt to reduce the home made share of the inflation does have a sting in its tail. Lower home made inflation is equivalent to higher unemployment and lower economic growth - we can't have it both ways.

So - why does it matter anyway how much of the inflation is imported?

Spoken like a real Green MP -- like your thinking

[Muse]

Isn't this a bit simplified?

Last time I checked: hairdressers do need to eat, i.e. buy food (which is dependent on the world market prices). Most will need to dress themselves - and clothes are all imported. They need to drive a car to work (i.e. buy petrol, which is imported). They need to pay rent which is related to house prices ... and while houses are local, one of the reasons house prices are so high is that building materials (many imported or dependant on world market prices) are in the stratosphere. Which sort of means - if they rise their prices (below the average anyway), they do that because they need to survive. Is this home made inflation?

But hey - I don't think that all inflation is imported, but neither is all inflation home made.

And obviously - any attempt to reduce the home made share of the inflation does have a sting in its tail. Lower home made inflation is equivalent to higher unemployment and lower economic growth - we can't have it both ways.

So - why does it matter anyway how much of the inflation is imported?

Tradeable inflation (at 8.5% and nearly 40% of the CPI basket) can come and go quickly from supply chain mess, russia invasion, etc, and reserve bank more likely to look through some of that

Non tradeable IE domestic inflation is more sticky, and concerning. At nearly 60% the basket and 6%, its damned high. This is what tends to inform and set expectations for wage inflation, services inflation, etc and has the potential to become entrenched and self fullfilling and what the RBNZ focused on when setting the OCR trajectory.

It also matters as consensus was for something like 7.1% and while undershooting that a little bit it appears that was due to (in ASB's words) "a less rapid than expected lift in tradeable prices" which they believe to be a timing issue (something to do with unexpected large cuts to airfares which will reverse out). So while a wee miss to consensus, underlying non tradeable inflation came in high, and that is what the RBNZ tend to focus on

[BlackPeter]

Spoken like a real Green MP -- like your thinking

Hmm - Without giving too much away, but I while I do have some personal interest in this planet to survive some more generations, I am neither political "Green" nor an MP.

Anyway - glad you like it :p .

[bull....]

7% inflation means most sttock investors are losing money in real terms even taking account of dividends

[percy]

7% inflation means most sttock investors are losing money in real terms even taking account of dividends

Yes most,but not all...lol.

[couta1]

7% inflation means most sttock investors are losing money in real terms even taking account of dividends Your losing even more with cash or bank deposits.

[bull....]

Yes most,but not all...lol.

yes some people will have picked up some good companies at low prices during early 2020 that are now paying div's in excess off the 7% inflation.
we all have to hope the coming slowdown due to rising rates which will effect most companies eventually doesnt mean those div get cut and even worse if its a slowdown and inflation remains high

[Rawz]

No place to hide with inflation. But equities better than cash. And some equities are better than others. HGH and TRA come to mind

[Aaron]

7% inflation means most sttock investors are losing money in real terms even taking account of dividends

If prices fall then the losses are pretty significant once adjusted for inflation. House prices falling at 4% with inflation at 6-7% maybe we will be back in balance before too long.

Regarding home grown inflation would the RBNZ Balance Sheet doubling in size between March 2020 and March 2021 play any part? How many billions of dollars have been handed out by govt for the wages subsidies and resurgence support payments over the last year or so?

[Jiggs]

Inflation means banks will put up their lending rates, which make share-buyers think their profits will go up - and the value of their shares. So five weeks ago I bought Westpac, and I'm already well ahead of this year's inflation rate, although it is starting to look a bit over-valued now. ANZ still looked sick five weeks ago, so I waited until last week to buy some shares in it, and now it has taken off too.

I guess that house-owners will eventually default on their loans en masse, and the whole banking house of cards will collapse, but I aim to be out of that house before then, and buying something steady like electricity and internet shares.

[JBmurc]

Bank earnings signal dark clouds on the horizon

https://edition.cnn.com/2022/04/14/investing/goldman-sachs-wells-fargo-citi-morgan-stanley-q1-earnings/index.html

Citi saw a drop of 46%, Goldman Sachs fell 42%, Morgan Stanley dropped 11% and Wells Fargo fell 21%.Since 2020, banks have benefited from the longest bull run in history, record-high trade volumes, surging bank deal values, low interest rates and big reserve releases driving profit spikes.Now executives are warning that the good times are coming to an end.

[winner69]

Inflation ..... no worries. Grant has it under control

[Bjauck]

Your losing even more with cash or bank deposits. Especially when already below inflation interest rates are further socked by tax. There are not many winners from this post Covid/Russian invasion inflation.

[winner69]

OCR still lower than 3 years …..something has gone really wrong with inflation so high

[Ggcc]

For those who've read in the media inflation is all imported and nothing to do with domestic stuff -- Hairdressing (essentially non-tradable and not imported) shows a 5.6% annual increase .....many more examples like that
If minimum wage increases 6% why can’t hairdressers earn 5.6% more. In fact why can’t we all earn 5.6% more?

Of course as black Peter showed there is more to the story which people who are not hairdressers don’t understand. Or those who have never had a business

[Panda-NZ-]

Those who have never had a business have to pay 40-50% to the IRD (paye, GST, student loans) before rent payments.

Business get covid relief subsidies, no cgt, open slather migration policies.

[nztx]

Inflation ..... no worries. Grant has it under control


The Orr man reckons he might have lost his paddle .. but no worries :)

Watch this space :)

[nztx]

Those who have never had a business have to pay 40-50% to the IRD (paye, GST, student loans) before rent payments.

Business get covid relief subsidies, no cgt, open slather migration policies.


but whose jobs got protected while Businesses were basically left in the lurch ? ;)

[Ggcc]

Those who have never had a business have to pay 40-50% to the IRD (paye, GST, student loans) before rent payments.

Business get covid relief subsidies, no cgt, open slather migration policies.
Who takes most of the risk employer or employee

[bull....]

i see the fed going to help cure the inflation problem ( maybe as it early days )

“It is appropriate in my view to be moving a little more quickly” to raise interest rates, Powell said while part of an International Monetary Fund panel. “I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. ... I would say 50 basis points will be on the table for the May meeting.”

https://www.cnbc.com/2022/04/21/powell-says-taming-inflation-absolutely-essential-and-50-basis-point-hike-on-the-table-for-may.html

i see the markets are tanking now and the 10 yr nearly at my mentioned 3% powell got our backs .... dont fight the fed as they say

[winner69]

First everybody talked about “transitory” inflation. The last week or so it’s about “peak” inflation.

Maybe talking about “never-ending” inflation is next

[Bjauck]

OCR still lower than 3 years …..something has gone really wrong with inflation so high The RBNZ remit is to keep (CPI-Consumer Price) inflation between 1-3% in the medium term. As I understand it, that meant we had years of low interest rates causing asset and residential house price inflation far exceeding "consumer" price inflation.

So now the Reserve Bank should be desperately trying to raise the OCR to bring down CPI inflation, despite the effect on house values? However all those years of low interest rates - and high new mortgage to household income ratios - has meant the RBNZ have helped NZers channel their borrowings and wealth into hyper-inflated housing. It is a bubble, of the government's and RBNZ's making, that the RBNZ does not want to pop. So I guess now they won't be so desperate to bring the CPI inflation rate down?

[Panda-NZ-]

So now the Reserve Bank should be desperately trying to raise the OCR to bring down CPI inflation, despite the effect on house values? However all those years of low interest rates - and high new mortgage to household income ratios - has meant the RBNZ have helped NZers channel their borrowings and wealth into hyper-inflated housing. It is a bubble, of the government's and RBNZ's making, that the RBNZ does not want to pop. So I guess now they won't be so desperate to bring the CPI inflation rate down?

Our innovative spirit in policy making was lost some time ago so it simply becomes copying what the rest of the world is doing.

Everyone is on the ship together.

[bull....]

everyone should start stock piling food before you cant afford it next yr.
the chinese have been doing it the last yr so they must have seen what is coming

[Rawz]

everyone should start stock piling food before you cant afford it next yr.
the chinese have been doing it the last yr so they must have seen what is coming

Get ya vege garden up and running. I reckon ive eaten couple of hundred bucks of spinach out of the garden this year already

[couta1]

Get ya vege garden up and running. I reckon ive eaten couple of hundred bucks of spinach out of the garden this year already Yep NZ are basically self sufficient peoples.

[percy]

Get ya vege garden up and running. I reckon ive eaten couple of hundred bucks of spinach out of the garden this year already

Sounds like a user name change is called for.....Popeye.?....lol.

[BlackPeter]

First everybody talked about “transitory” inflation. The last week or so it’s about “peak” inflation.

Maybe talking about “never-ending” inflation is next

Just wondering how the people feel who bought a couple of years ago bonds with negative interest rates and principle due in 30 (or even more) years ...?

I am sure they thought at buy time that the negative interest rates will never end. Maybe similar to the now never-ending inflation ...

I guess given that everything seems to move in cycles better adopt a cyclical investment strategy to suit. Linear thinking is just so last millenium ...

[JohnnyTheHorse]

Just wondering how the people feel who bought a couple of years ago bonds with negative interest rates and principle due in 30 (or even more) years ...?

I am sure they thought at buy time that the negative interest rates will never end. Maybe similar to the now never-ending inflation ...

I guess given that everything seems to move in cycles better adopt a cyclical investment strategy to suit. Linear thinking is just so last millenium ...

Probably feeling better than the people taking on debt to their eyeballs with the promise of ever lowering rates.

Always funny how when everyone is on the same side of the trade it always seems to go the other way.

[BlackPeter]

Probably feeling better than the people taking on debt to their eyeballs with the promise of ever lowering rates.

Always funny how when everyone is on the same side of the trade it always seems to go the other way.

Just applied physics.

Imagine an unstable boat with passengers running in synch from one side to the other (and back). Two options - either the passengers run back soon enough and continue the cycle ... or the boat sinks.

Same thing with the economy.

[Bjauck]

Our innovative spirit in policy making was lost some time ago so it simply becomes copying what the rest of the world is doing.

Everyone is on the ship together. Actually with respect to mortgaging lending, NZ differed from other countries by relaxing High LVR restriction during the pandemic. Hey Presto! With lower interest rates, the bubble inflated even more...

NZ also has a higher proportion of higher risk lending to people with high debt to income ratios, with three times as much lent to those whose DTI is greater than 8 when compared to Australia.

https://www.stuff.co.nz/business/128396590/world-watching-nz-housing-market-as-auckland-labelled-canary-in-coal-mine

[bull....]

nz 10 yr at new highs . could we see US bonds over 3% tonight ?

[alokdhir]

nz 10 yr at new highs . could we see US bonds over 3% tonight ?

When yields go higher then Bond prices go down ...means heavy selling in bonds going on ...where they intend to put that money who so ever are selling bonds ...surely not as cash in bank ....maybe thats what keeping US markets buoyant ...sell bonds and buy stocks ??

[bull....]

When yields go higher then Bond prices go down ...means heavy selling in bonds going on ...where they intend to put that money who so ever are selling bonds ...surely not as cash in bank ....maybe thats what keeping US markets buoyant ...sell bonds and buy stocks ??

US markets tanking so maybe the cash being raised is going into sitting in US dollars

worst thing is nz market closed monday so if US market crashed we have to wait till tues ... black tuesday ?

[BlackPeter]

US markets tanking so maybe the cash being raised is going into sitting in US dollars

worst thing is nz market closed monday so if US market crashed we have to wait till tues ... black tuesday ?

Why complaining? This holiday gives traders 24 more hours to look forward to their losses and shorters 24 more hours to look forward to their gains :p ; They say anticipation is the finest of all joys (Vorfreude ist die schönste Freude) ...

Anyway - I agree though that we should vote next time for a government which promises to reduce the number of public holidays instead of increasing them. These short working weeks are just annoying and not only mixing up the workflow but increasing inflation as well.

[bull....]

Why complaining? This holiday gives traders 24 more hours to look forward to their losses and shorters 24 more hours to look forward to their gains :p ; They say anticipation is the finest of all joys (Vorfreude ist die schönste Freude) ...

Anyway - I agree though that we should vote next time for a government which promises to reduce the number of public holidays instead of increasing them. These short working weeks are just annoying and not only mixing up the workflow but increasing inflation as well.

less than 24 hrs to see more red in the US tonight ?, i see the early futures are not to healthy at the moment down 200 odd so far for tonight

[couta1]

less than 24 hrs to see more red in the US tonight ?, i see the early futures are not to healthy at the moment down 200 odd so far for tonight Toss a coin, futures often mean squat, few red days followed by strong green bounce is the normal pattern in a volatile market. With many stocks on the NZX at 2-3 yearly lows compared with the hyped up US market you would think they have a lot further to fall by comparison but of course the market is not logical due to fear contagion.

[alokdhir]

Tomorrow is going to test NZX strength ...if we manage to close flat to down half percent then we have done well ...

Today China is the biggest down mover on fears of many cities coming under lockdown soon .

Lets hope our already sluggish market doesn't breakdown and holds Jan lows of 11700 ....next few days may test lows again ...fingers crossed

[bull....]

Tomorrow is going to test NZX strength ...if we manage to close flat to down half percent then we have done well ...

Today China is the biggest down mover on fears of many cities coming under lockdown soon .

Lets hope our already sluggish market doesn't breakdown and holds Jan lows of 11700 ....next few days may test lows again ...fingers crossed

china had a 5% fall yesterday , might not be so good for nz all these fears of further lockdowns , slowdowns in china if they materalize. anyway i see the US markets having a rally of the lows on oversold bounce intra day probably wont last over time

i agree the 11700 level if breaks down is very negative going forward. asx looks like a 2 - 3% fall on open at the moment

[couta1]

Haha futures were crystal ball rubbish as they often are, NZX bacon saved by a public holiday.

[Old mate]

Nzx saved by Elon musk:t_up:

[couta1]

Hmm looks like the NZ punters are asleep at the wheel, probably don't realise the US was up instead last night, too much booze on Anzac day.

[bull....]

hmm dissapointing it didnt fall more they must be a sleep still ... maybe when asx opens they be awake by then

[bull....]

those people who brought yest are getting a hiding today in the US , looks like aus is in for a thumping again too , guess nz will wake up soon when the lala juice wears off

The prospect of slower economic expansion alongside persistent inflation is leading to a febrile mood in markets. The panoply of risks spans the pandemic, supply-chain disruptions, Fed tightening and Russia’s grinding war in Ukraine

https://www.bloomberg.com/news/articles/2022-04-26/bonds-rise-stocks-struggle-amid-china-covid-worry-markets-wrap?srnd=premium-asia

i have the sp500 been in a big range 4200 - 4600 so if it breaks down still plenty of downside coming , nasdaq similar big range

[percy]

The old saying "Sell in May and go away" appears to be happening a few days early.

[winner69]

The old saying "Sell in May and go away" appears to be happening a few days early.

Our man Greg selling?

[alokdhir]

Can NZX hold 11700 ....most important question ...which only W69 can answer !! :p

[winner69]

Can NZX hold 11700 ....most important question ...which only W69 can answer !! :p

Does it really matter?

[alokdhir]

Does it really matter?

For long term purposes ...not really ....But for new opportunities purposes maybe yes ....

[bull....]

see on cnbc boss of interactive brokers saying traders/investors on there platform have highest holdings of cash for ages , lowering margin also
also robin hood laying off staff reinforcing my post earlier on the thread of aus brokers saying cash is high now among there clients.

after hrs earnings reports from some off the tech majors didnt go down well futures selling off again

[bull....]

of course this is what happens to bloated markets if beijing goes into lockdown


https://youtu.be/JfOSj5WE4hk

[Rawz]

what the heck did i just watch???

[Joshuatree]

Lololololololololol

[alokdhir]

NZD reaching 65 levels again should support our market eventually

[Hoop]

NZ50C STATUS: BEAR

When in Bear status expect it to act like a bear..dangerous, sometimes calm and seemingly cute, displays of multiple bouts of bad temper, sudden irrational behaviour.

Descending Triangle patterns are classed as bearish continuation patterns when in a down trending environment ..In these down trending environments the descending triangle has a high odds of breaking out lower..

Assuming the NZ50c will break out downwards today (close below 4750ish) the trading calculation target will be 4800 - (5100 - 4800) = 4500.
That 4500 is a line in the sand..a rough point (without any major positive news) at when a more positive trading sentiment should start to reappear.

The chart below is ugly

13738

[Joshuatree]

Mr Creosote is ugly too. Maybe time to remind oneself if one is a long term investor or a trader.Long termers ride it out depending on what cycle each company is in(eg FPH down cycle) and ones timeframe.

[Hoop]

Mr Creosote is ugly too. Maybe time to remind oneself if one is a long term investor or a trader.Long termers ride it out depending on what cycle each company is in(eg FPH down cycle) and ones timeframe.
See my PPH #2678 post (https://www.sharetrader.co.nz/showthread.php?9699-PPH-PushPay-(Church-donor-software-)/page268) written a few minutes ago

[Panda-NZ-]

It's pretty pathetic the US can't regulate social media.

It's a national security risk given what has happened with corona, it's scary to imagine what happens with something even more impactful.

[Entrep]

Not the mega bloodbath I was expecting. Nice to see WHS up 3%.

[couta1]

Not the mega bloodbath I was expecting. Nice to see WHS up 3%. Not really a surprise as we were down yesterday whilst the US was up and the ASX was down even more so leading not following.

[Entrep]

Not really a surprise as we were down yesterday whilst the US was up and the ASX was down even more so leading not following.

There we go

[winner69]

Huge trade deficit in March .... a month when NZ usually has large surpluses

Trade deficits usually not good to future company profits

[bull....]

US markets tanking so maybe the cash being raised is going into sitting in US dollars

US dollar on fire but getting close to top of a range i reckon

since 2018 my range on da charts has been

88 - 103 roughly lets see what happens

[Tomtom]

Appears the Chinese are announcing a new city to lockdown every day. Surely this will have some impact on inflation if they are going to do another shutdown?

[bull....]

i have the sp500 been in a big range 4200 - 4600 so if it breaks down still plenty of downside coming , nasdaq similar big range

so big bounce for US markets today off the bottom of the range.
i see after market amazon report was not very good and apple was alright but both stocks trade on high forward pe so lets see how long 4200 or just under hold

[STr]

A pretty positive Earnings week. How do you all see next week going with the Fed announcement ? I suspect a sell off tomorrow (risk off) before the weekend and then everyone holding their breath for the Powell update ? Perhaps this may be slightly dovish given the GDP is in decline ?

[Ricky-bobby]

There’s going to be some pretty big profit downgrades come through in the next 3-6 months I recon. Balance sheet is getting smashed by inflation and freight… FY23 p&l is looking ugly. exporters are going to find it bloody hard especially. It’s going to get interesting…

[winner69]

Hard landing on way

From ANZ

[Panda-NZ-]

Robinhood's era of fun and games is over.

https://www.washingtonpost.com/business/energy/robinhoods-era-of-fun-and-games-comes-to-an-end/2022/04/27/ddc48de0-c658-11ec-8cff-33b059f4c1b7_story.html

I wonder how small investors are faring as they prefer meme stocks with high PE ratios.

[bull....]

A pretty positive Earnings week. How do you all see next week going with the Fed announcement ? I suspect a sell off tomorrow (risk off) before the weekend and then everyone holding their breath for the Powell update ? Perhaps this may be slightly dovish given the GDP is in decline ?

here article on the negative gdp in US saying the result was misleading due to several factors

Imports soared nearly 20% as Americans spent heavily on foreign-made goods, while exports fell almost 6% as growth slowed overseas — a widening of the trade deficit that subtracted 3.2 percentage points from GDP

US economy shrinks, threats loom, but growth likely to last
https://apnews.com/article/us-economy-shrinks-in-Q1-7eb454a7874abeba545f8796edb38edb

[JBmurc]

Robinhood's era of fun and games is over.

https://www.washingtonpost.com/business/energy/robinhoods-era-of-fun-and-games-comes-to-an-end/2022/04/27/ddc48de0-c658-11ec-8cff-33b059f4c1b7_story.html

I wonder how small investors are faring as they prefer meme stocks with high PE ratios.

Yes I was told to BUY Gamestop other day from Hotel worker LOL>>>

[bull....]

so big bounce for US markets today off the bottom of the range.
i see after market amazon report was not very good and apple was alright but both stocks trade on high forward pe so lets see how long 4200 or just under hold

just as we thought , just a bounce of support yesterday. looks like the support is breaking down now . to be confirmed next week. targets around or just below 3800 the charts say for this move

[Panda-NZ-]

Nasdaq down 4%.


here article on the negative gdp in US saying the result was misleading due to several factors



I think some modest deflation should be allowed too just to make up for the recent price increases.

[winner69]

just as we thought , just a bounce of support yesterday. looks like the support is breaking down now . to be confirmed next week. targets around or just below 3800 the charts say for this move


Jeez, mention of 3800 scary

Onlyba few months ago many ridiculed Morgan for mentioning 4440

[bull....]

markets puking today ( puking is a financial term )


https://www.youtube.com/watch?v=aczPDGC3f8U

when will the blow up come ?

[Muse]

Nasdaq down 4%.



I think some modest deflation should be allowed too just to make up for the recent price increases.

S&P500 down 3.6% so far too....

[bull....]

wonder if other exporters are having this problem .... no good for NZ

Fonterra says China dairy imports dropped 29 per cent in March
https://www.nzherald.co.nz/business/fonterra-says-china-dairy-imports-dropped-29-per-cent-in-march/WQWEZ3BAFTHH22JJOVQXRTDWIY/

[winner69]

Maybe it’s the CNBC presenters doing the panic thing. Heard this - Once a hypervalued market is joined by a shift toward risk-aversion and other upward pressures on yields, it's typically best to panic before everyone else does

[Panda-NZ-]

wonder if other exporters are having this problem .... no good for NZ

Fonterra says China dairy imports dropped 29 per cent in March


https://www.nzherald.co.nz/business/fonterra-says-china-dairy-imports-dropped-29-per-cent-in-march/WQWEZ3BAFTHH22JJOVQXRTDWIY/

Global food prices are skyrocketing though (maybe it will cause famines).

NZ will benefit the worse it becomes.

[stoploss]

wonder if other exporters are having this problem .... no good for NZ

Fonterra says China dairy imports dropped 29 per cent in March


https://www.nzherald.co.nz/business/fonterra-says-china-dairy-imports-dropped-29-per-cent-in-march/WQWEZ3BAFTHH22JJOVQXRTDWIY/
About time they cut the price of butter , obviously less demand .

[winner69]

OMG - US markets down even further last hour .... no end of day rally?

[winner69]

No worries though[

We’ve hit the market bottom, if you’re not buying it’s a mistake, says Jim Lebenthal

Cramer says the bear market is over


Jeez that CNBC has so many cheerleaders it's almost a circus

[BlackPeter]

Global food prices are skyrocketing though (maybe it will cause famines).

NZ will benefit the worse it becomes.

Yes, but what the world now needs is lots of affordable carbohydrates and proteins, not the expensive top quality range NZ tends to provide. Starving people don't need (i.e. can't afford) expensive venison loins and salmon steaks but cheap grain, cheap vegetables, cheap plant based oil and cheap potatoes ...

[mike2020]

We need to phase out dairy and diversify fast. I cant see it being business as usual for much longer. The damage to the water alone isn't worth it. Govt and Fonterra asleep at the wheel. Although Fonterra did invest in lab grown milk a few years ago so they do know what is coming.

[Baa_Baa]

We need to phase out dairy and diversify fast. I cant see it being business as usual for much longer. The damage to the water alone isn't worth it. Govt and Fonterra asleep at the wheel. Although Fonterra did invest in lab grown milk a few years ago so they do know what is coming.

"phase out diary" ... this is what you think should be phased out of the NZ economy? (https://www.dcanz.com/about-the-nz-dairy-industry/)

"In the year to March 2020, New Zealand exported NZ$19.7 billion of dairy products, which supported NZ$10.2 billion of direct value add to the New Zealand economy. Dairy is New Zealand’s largest value-added contributor by far. In 30 years, dairy exports have grown from just over NZ$2 billion per year to almost $20 billion.

Dairy makes a significant contribution to economic activity across regional New Zealand, accounting for more than 5% of the GDP in 7 regions in 2019 (and more than 10% in four of those). The West Coast has the greatest share of GDP from dairy at 16%. It provides fulfilling and diverse careers for around 50,000 people, mostly in New Zealand’s regions and rural communities.

New Zealand dairy jobs are well paying ones, with average wage levels for dairy farming and processing being higher than comparable industries.

Revenue from dairy exports flows to every region in New Zealand. Dairy farming and processing are top 10 purchasers from 1/3rd of all other New Zealand sectors, which account for 42% of GDP."

Ok then, what would you suggest to diversify in to that would replace that contribution to the NZ economy?

[bull....]

Global food prices are skyrocketing though (maybe it will cause famines).

NZ will benefit the worse it becomes.

no we wont.

here's an example of why

Major Brazil Soybean Grower to Cut Fertilizer Use Amid Shortage
https://www.bloomberg.com/news/articles/2022-04-28/major-brazil-soybean-grower-to-cut-fertilizer-use-amid-shortage


less fertilizer , less food output

[bull....]

Maybe it’s the CNBC presenters doing the panic thing. Heard this - Once a hypervalued market is joined by a shift toward risk-aversion and other upward pressures on yields, it's typically best to panic before everyone else does

yes i panicked many hundreds points ago , now the hardest part for me in a bear market is not buying to early.

i see jim cramer saying monday could be ugly

CNBC’s Jim Cramer said Friday that he expects a rough start to next week on the heels of a dismal end to April in the stock market

https://www.cnbc.com/2022/04/29/cramers-week-ahead-jam-packed-earnings-season-continues.html

and historically april is usually the best mth for stocks ..... obviously they forgot the script this yr. wonder if sell in may will work this yr ?

[alokdhir]

NZD closed at 0.6455 ...which is on right path to support the lop sided economy ...Exporters need support and importers need hurdles like higher import prices while better realisation of exports . Every time economy falters NZD provides support by moving lower to rebalance it towards exports from blatant consumerism .

W69 posted record trade deficit in March .

When punters like WHS more then FPH then its time to rebalance ....lol :D

[winner69]

NZD closed at 0.6455 ...which is on right path to support the lop sided economy ...Exporters need support and importers need hurdles like higher import prices while better realisation of exports . Every time economy falters NZD provides support by moving lower to rebalance it towards exports from blatant consumerism .

W69 posted record trade deficit in March .

When punters like WHS more then FPH then its time to rebalance ....lol :D

Excessive trade deficits generally are not good for corporate profits ...... and as a 'strong' is a sign of a strong economy and something we should be proud of so hopefully it gets back over 70/75 cents sooner than later