Black Monday

[ynot]

The 20 bucks a week will apply from July 31. If you are lucky enough to get that and not 2 bucks/wk (most pensioners).

Thanks for draining the country dry Robbo.

[Panda-NZ-]

That would be the Aussie banks.

We had a credit rating upgrade if I recall under the last lot.

[bull....]

Ministry of Primary Industries warns chances of bird flu outbreak in New Zealand are rising


https://www.newshub.co.nz/home/new-zealand/2024/06/ministry-of-primary-industries-warns-chances-of-bird-flu-outbreak-in-new-zealand-are-rising.html


have you done your homework to work out which stocks will get hammered if it did come here ?

[Valuegrowth]

Large Caps Vs. Small caps, value stocks and commodities
https://www.youtube.com/watch?v=EQg7ppLDd-A

[mike2020]

Large Caps Vs. Small caps, value stocks and commodities
https://www.youtube.com/watch?v=EQg7ppLDd-A

Are they ditching NVDA for OCA? Would be a smart trade.

[Valuegrowth]

You're right. Time for smart professional trading and smart intelligent investment. Anything is attractive I will be
there. Even in a steep down market I have 2 smart trading. I can sell my 2 Australian ETFs and rotate them and add to my intelligent investment.Fingers crossed.

[Valuegrowth]

High unemployment can cause next crisis. Fortunately, still unemplyment rate has not gone up rapidly.
https://www.youtube.com/watch?v=ih0LgO2cTgc

[Valuegrowth]

https://www.youtube.com/watch?v=uScGwA-rvwc

[troyvdh]

Sadly VG ...history I believe indicates that a major conflagration is well overdue.

[Valuegrowth]

I also think so and sad Tro....
Sadly VG ...history I believe indicates that a major conflagration is well overdue.

[Valuegrowth]

Ministry of Primary Industries warns chances of bird flu outbreak in New Zealand are rising


https://www.newshub.co.nz/home/new-zealand/2024/06/ministry-of-primary-industries-warns-chances-of-bird-flu-outbreak-in-new-zealand-are-rising.html


have you done your homework to work out which stocks will get hammered if it did come here ?
This egg producer is riding high up by more than 4% and bucking the trend. Bird flu there has not affected and poultry stocks there going to get hit 52 weeks high. I took positions in consumer staples.

https://finance.yahoo.com/quote/CALM/?fr=sycsrp_catchall

[winner69]

All going to plan ..eventually

From Westpac NZ Employment Confidence -

Turning for the worse

Employment confidence fell by 13 points to 91.4 in the June quarter, reaching its lowest level since 2020.

Jobs are seen as increasingly hard to come by, signalling a further rise in the unemployment rate in the months ahead.

Perceptions about pay growth and job security also declined.

Confidence was down across all regions and age groups.

[Valuegrowth]

History is repeating. If markets get hit with black swan events like banking crisis, debt crisis or any other asset crisis unemployment rate will be rocketed. As Long as depression is not there once markets enter bear market, it will follow the bull market. Much needed major corection in all time high assets are on the way.

[Valuegrowth]

Are they ditching NVDA for OCA? Would be a smart trade.Dropping NVDA these days is just the tip of the iceberg.

[Daytr]

Dropping NVDA these days is just the tip of the iceberg.

I'm not sure that this is nothing more than a profit taking pull back. US stocks do seem expensive especially when sitting in depressed NZ, but profits of the tech titans has largely kept growing and some at pretty strong rates.

I am yet to see the catalyst for a sharp correction, obviously something from left field could eventuate, but then interest rates would probably be dropped quickly.

[Jaa]

It is just AI driving the NASDAQ higher isn't it? Nvidia now worth 3.34T, up 43% in a month and now the most valuable company in the world (https://www.reuters.com/markets/us/nvidia-becomes-worlds-most-valuable-company-2024-06-18/).

The thing is people are working out it is not real AI, just algebra and therefore derivative. Thus the hallucination problem is built in. Sam Altman has a problem with the truth and has oversold what it can do.

This would be fine, except that AI is very expensive, both to train and to answer queries. Lot of effort now going into more efficient models like GTP4o and caching which need less hardware. Sure the models become a bit less accurate but since you can't rely upon them to be 100% accurate anyway who cares.

Andriy Burkov's twitter (https://twitter.com/burkov) makes for interesting reading.

IFT seems to be running into this trap, why would anyone use data centres in Aus/NZ for AI where it costs (way) more to do so?

Pretty near the peak of the bubble IMO.

Looks like I called this to the day.

Nvidia rising by the value of Lockheed Martin in a day was ridiculous.

Even go-go stock investment fund, Frazis Capital is out.

[Daytr]

Looks like I called this to the day.

Nvidia rising by the value of Lockheed Martin in a day was ridiculous.

Even go-go stock investment fund, Frazis Capital is out.

That got old quick...
Just kidding, NVDA in someways are taking the least risk by being the supplier to the other big tech firms who are making the big promises on the benefits AI will deliver.

There will always demand for faster chips well unless chip tech gets surpassed which is quite possible in the future.
That's not to say NVDA won't be at the front of the next evolution, but who knows, the risk to them and its a big risk, is its another player from left field.

[Jaa]

That got old quick...
Just kidding, NVDA in someways are taking the least risk by being the supplier to the other big tech firms who are making the big promises on the benefits AI will deliver.

There will always demand for faster chips well unless chip tech gets surpassed which is quite possible in the future.
That's not to say NVDA won't be at the front of the next evolution, but who knows, the risk to them and its a big risk, is its another player from left field.

Hard disagree. NVIDIA is equivalent to a mining services company, boom and bust.

Look at Sun or Intel during the dot com boom to see what happens to the share price.

Or Nvidia's history itself. Michael Frazis says this well (https://michaels-newsletter-e43fb3.beehiiv.com/).


If you’ve been reading these notes you’ll know how bullish we’ve been on semiconductors, with Nvidia our top pick. We set extremely optimistic profit targets across our semiconductor exposure, and these were hit in the recent surge.

I am sure we’ll get another entry point - perhaps quite soon - and will go again. If you applied this approach systematically to Nvidia over the last 25 years, covering the dotcom crash, 2008-2009, COVID, 2022, and multiple 65-90% drawdowns, you earned nearly 3x the return of the stock itself (1500x vs 500x), with substantially lower drawdowns (53% vs 90%).

[winner69]

Australia CPI SHOCKER 4.0% …increase from May and higher than expected


Seems Reverse Bank Australia will have to hike rates in already stumbling into Recession economy.

[alokdhir]

Australia CPI SHOCKER 4.0% …increase from May and higher than expected


Seems Reverse Bank Australia will have to hike rates in already stumbling into Recession economy.

Thats what happens when Central Banks are WAY behind the curve and very hesitant to inflict pain for fear of being unpopular ... RBA raised rates so reluctantly ...maybe now they will need do Volcker !!!

[Valuegrowth]

Australia CPI SHOCKER 4.0% …increase from May and higher than expected


Seems Reverse Bank Australia will have to hike rates in already stumbling into Recession economy.All over the world employees have a high level of financial stress, particularly low-wage employees.I met a couple from Canada last week and they told me even with two people working buying a house is not that easy. Main reason for the current situation is all types of assets and things we use have rocketed.

[troyvdh]

VG essentially I believe that history...reading etc is no longer valued.
I understand that there is saying.
Fear those whose TV screens are bigger than their book shelves.

[Daytr]

Hard disagree. NVIDIA is equivalent to a mining services company, boom and bust.

Look at Sun or Intel during the dot com boom to see what happens to the share price.

Or Nvidia's history itself. Michael Frazis says this well (https://michaels-newsletter-e43fb3.beehiiv.com/).

The big difference is NVDA is earning real money with strong growth of earnings. I don't know if NVDA is over valued or not, but it's not the same as the DOT Com boom as those companies didn't have the earnings.

Disagreement is what makes a market.

[dln]

https://www.theregister.com/2024/06/25/nvidia_share_price_drop/

[alokdhir]

https://www.newshub.co.nz/home/money/2024/06/interest-rates-expected-to-fall-significantly-anz.html

Writing was on the wall long ago but now many more beginning to SEE it ...time to act for investment for future is NOW not 12 months later ...imho

[Valuegrowth]

https://www.theregister.com/2024/06/25/nvidia_share_price_drop/No company is 100% risk free.

When a company is riding high, get crowded and trading historically high PE ratio I will try to find answers to the following questions.

1. Do they have a sustainable business model?
2. Is the current price reflects its real businee value? Is it overpriced or underpriced!
3.Are there better options in the market? I have.
4.will the history repeat in the tech sector like before? I think so 100%.
5.Will there be competitors?
6.Do they have a long term plan and sustainable growth?

[Valuegrowth]

VG essentially I believe that history...reading etc is no longer valued.
I understand that there is saying.
Fear those whose TV screens are bigger than their book shelves.Troy I agree.Very good quote. Thanks.

[Valuegrowth]

https://www.theregister.com/2024/06/25/nvidia_share_price_drop/


https://www.straitstimes.com/business/chipmaker-micron-s-sell-off-shows-risk-of-sky-high-ai-expectations

[bull....]

if your invested big in the us markets the trump vrs biden debate on at 1pm nz time today

[Ggcc]

if your invested big in the us markets the trump vrs biden debate on at 1pm nz time today
If I was a voting man and had a choice between them both I would choose Trump, not that I want him as president. Biden waffles and Trump is to the point and clear with his communication throughout this debate.

[Panda-NZ-]

If I was a voting man and had a choice between them both I would choose Trump, not that I want him as president. Biden waffles and Trump is to the point and clear with his communication throughout this debate.

I wish I could do crime and then say "they were all against me" and walk free; for some reason.

Luckiest bloke ever.

[Daytr]

If I was a voting man and had a choice between them both I would choose Trump, not that I want him as president. Biden waffles and Trump is to the point and clear with his communication throughout this debate.

But many of Trump's points are lies.
How many times did he say "everyone agrees " with this that & the other "
Unfortunately his avid followers won't question the obvious.

[Wright]

Sounds like the Justice system under the Adern Government.



I wish I could do crime and then say "they were all against me" and walk free; for some reason.

Luckiest bloke ever.

[Panda-NZ-]

Sounds like the Justice system under the Adern Government.

White collar crims have always had an easy time in NZ.

[Ggcc]

I wish I could do crime and then say "they were all against me" and walk free; for some reason.

Luckiest bloke ever.

But he was also the most coherent while watching the debate. Like I said if I had a choice, Trump it would be. Biden is struggling with communication

Loads of politicians in US should be behind bars.

[Ggcc]

White collar crims have always had an easy time in NZ.

Everywhere, not just NZ. I agree this needs more action.

[Getty]

After the incompetent bumbling performance by Joey in the Presidential debate, expect a 500 point plus drop in the Dow overnight?

[Daytr]

After the incompetent bumbling performance by Joey in the Presidential debate, expect a 500 point plus drop in the Dow overnight?

You want a bet on that?

[Getty]

You want a bet on that?
You being a day trader, will be able to take your own position on that.

[troyvdh]

I understand that 70 % of Americans believe in angels and heaven.

20 % of Americans believe the moon landing is fake.

I reckon they get the president they deserve.

[Daytr]

I understand that 70 % of Americans believe in angels and heaven.

20 % of Americans believe the moon landing is fake.

I reckon they get the president they deserve.

Unfortunately the rest of the world suffers.

[Paint it Black]

But he was also the most coherent while watching the debate. Like I said if I had a choice, Trump it would be. Biden is struggling with communication

Loads of politicians in US should be behind bars.
Every time Trump was asked a simple question he avoided answering it by going backwards to the previous issue. This was because he didn't know. But never mind he will sort it quickly with his charisma and negotiating skill ie brinkmanship. The world will become an even more scary place if he is elected.

[Ggcc]

I understand that 70 % of Americans believe in angels and heaven.

20 % of Americans believe the moon landing is fake.

I reckon they get the president they deserve.
If you look at the stats, most of the world believe in something that others disagree with. People need to find purpose and most of the people in the world are bored, hence they disagree with one another. Why else would we be here?

[Daytr]

If you look at the stats, most of the world believe in something that others disagree with. People need to find purpose and most of the people in the world are bored, hence they disagree with one another. Why else would we be here?

Yep but only dullards believe Trump's lies.
I would almost guarantee in every question he answered he lied at some point.

[Panda-NZ-]

Unfortunately the rest of the world suffers.

The rot is deep.

I was listening to marco rubio (running for Trump VP) and apparently Europe wants to avoid spending on defence to fund expansive social programs. Really, like social security and SNAP in the US?

Yes, they avoid spending on defence but they also have the same pension liabilities (Social security is probably worse for the US) as they do and spend much less on healthcare and prisons per person. Lies upon lies.

[Baa_Baa]

Yep but only dullards believe Trump's lies.
I would almost guarantee in every question he answered he lied at some point.

74,222,958 "dullards" voted for Trump in the 2020 election, which had the highest number of voters ever in US elections. 74 m i l l i o n. Go figure.

[Panda-NZ-]

I understand that 70 % of Americans believe in angels and heaven.

20 % of Americans believe the moon landing is fake.

I reckon they get the president they deserve.

Why the frack are issues like abortion and guns still front and centre.

Move on and start making your country a better place to live..

[Daytr]

74,222,958 "dullards" voted for Trump in the 2020 election, which had the highest number of voters ever in US elections. 74 m i l l i o n. Go figure.

As I said in a previous post, avid believers won't question. To not question makes you a dullard.
How many times has he said he is the most popular President in history? 🤣
He didn't even get the most votes in 2016, the archaic electoral system got him in.
And if it wasn't for the email debacle just before the election Hillary would have won.

Apparently he had the biggest crowd at an inauguration in history. 🤣

I watched about 15 minutes of the debate today & I would say he lied at least a dozen times just in that short period. "Everyone agreed" Etc. How many times did he say that?

Thank gawd we ain't America.

[Baa_Baa]

As I said in a previous post, avid believers won't question. To not question makes you a dullard.
How many times has he said he is the most popular President in history? 藍
He didn't even get the most votes in 2016, the archaic electoral system got him in.
And if it wasn't for the email debacle just before the election Hillary would have won.

Apparently he had the biggest crowd at an inauguration in history. 藍

I watched about 15 minutes of the debate today & I would say he lied at least a dozen times just in that short period. "Everyone agreed" Etc. How many times did he say that?

Thank gawd we ain't America.

I can't disagree with any of what you say, except that ... get this, 74 million people, FFS, 74 million people voted for him! I find it difficult to get my head around 74 million "dullards" voted for this compulsive lying alternate universe egomaniac far quit. But almost more amazing, 81.3 m i l l i o n "dullards" voted for a senile candidate who would be better consigned to a dementia facility than the White House. Unbelievable, truely unbelievable, except it happened, and OMG ... it's happening again!!

[troyvdh]

Baa Baa I dont believe you are wrong.
Putin and Xi will be overjoyed if he gets back in.
He adores both.

[Valuegrowth]

https://www.economicsobservatory.com/how-do-elections-affect-the-stock-market

[Baa_Baa]

Baa Baa I dont believe you are wrong.
Putin and Xi will be overjoyed if he gets back in.
He adores both.

Indeed they will be overjoyed, Trump is a kindred spirit and as close as you'll get to being a dictator in a democracy, and as the worlds largest superpower (for the time being), he would preside over powers to once again cuddle up to the other dictators like he did last time. Strange thing happened though, when he did that last time, global tensions subsided, USA withdrew from global conflicts, wars stopped. As he might say, he drained the swamp, or some of it at least, and the swamp didn't like it one bit.

Besides that, the USA was and might be again ruled by the same benign dictator immersed only in his own ego, but the world might again be in a less tumultuous space because of it. Quite the conundrum, hating someone because of their abhorrent behaviours but in TOTO thinking the world might be in a better place if it happened, if US hegemony and hubris were used to defuse global tensions, instead of inflaming them.

[Valuegrowth]

https://www.youtube.com/watch?v=Fq21LiFTGHw

[kiora]

Ministry of Primary Industries warns chances of bird flu outbreak in New Zealand are rising


https://www.newshub.co.nz/home/new-zealand/2024/06/ministry-of-primary-industries-warns-chances-of-bird-flu-outbreak-in-new-zealand-are-rising.html


have you done your homework to work out which stocks will get hammered if it did come here ?

Bird Flu is not a dead cert to being a problem yet

"With avian influenza spreading quickly around the globe, the virus has more opportunities to mutate and cause problems for people. By some calculations, H5N1 bird flu is still at least two mutations away from widespread human infections, but experts warn that new flu symptoms in individuals at high risk are likely to start turning up in health systems this summer."

https://www.medscape.com/viewarticle/new-human-cases-avian-flu-anticipated-2024a1000bfg?ecd=mkm_ret_240628_mscpmrk_id_top-content_etid6626722&uac=426896AZ&impID=6626722

"In 1997, a high-pathogenicity H5N1 avian influenza virus caused serious disease in both man and poultry in Hong Kong, China. Eighteen human cases of disease were recorded, six of which were fatal. This unique virus was eliminated through total depopulation of all poultry markets and chicken farms in December 1997. Other outbreaks of high-pathogenicity avian influenza (HPAI) caused by H5N1 viruses occurred in poultry in 2001 and 2002. These H5N1 viruses isolated had different internal gene constellations to those isolated in 1997"

https://pubmed.ncbi.nlm.nih.gov/14575073/#:~:text=In%201997%2C%20a%20high%2Dpathogenicity,c hicken%20farms%20in%20December%201997.

[winner69]

In US inflation expectations seem to be “well anchored”. University Michigan long-term inflation expectations just jumped to their highest level in … 31 years

[Valuegrowth]

Ministry of Primary Industries warns chances of bird flu outbreak in New Zealand are rising


https://www.newshub.co.nz/home/new-zealand/2024/06/ministry-of-primary-industries-warns-chances-of-bird-flu-outbreak-in-new-zealand-are-rising.html


have you done your homework to work out which stocks will get hammered if it did come here ?

Rather, I will worry about other types of bacterial and viral infections. Eg: Flesh eating bacterial disease.

https://www.outbreak.gov.au/current-outbreaks/avian-influenza

[Daytr]

In US inflation expectations seem to be “well anchored”. University Michigan long-term inflation expectations just jumped to their highest level in … 31 years

The PCE index was better than expected, in fact probably couldn't have asked for better.
https://www.reuters.com/markets/us/us-inflation-cools-may-consumer-spending-rises-moderately-2024-06-28/

[Daytr]

Deleted wrong thread

[bull....]

Company insolvencies and liquidations up, 474,000 people now behind on payments
https://www.rnz.co.nz/news/business/521027/company-insolvencies-and-liquidations-up-474-000-people-now-behind-on-payments

[Daytr]

Company insolvencies and liquidations up, 474,000 people now behind on payments
https://www.rnz.co.nz/news/business/521027/company-insolvencies-and-liquidations-up-474-000-people-now-behind-on-payments

And just to think Adrian Orr said at the last meeting they discussed the possibility of raising rates... As mentioned, I viewed this as talking tough rather than any likely action.

I think Orr will continue to talk tough until they are ready to act. A skill he should have learned a lot earlier, rather than saying too much.

[mike2020]

Take a look at the nzsx50 and the snp500 over the last 6 months. One is nearly the same and the other is up close enough to 20%.

You couldn't find a rental in our area a year ago, people begging for one on Facebook, now there's a few and mostly new builds that are not selling or renting as quickly.

And moving to Aus seems as popular as it was in the late 80s.

[bull....]

And just to think Adrian Orr said at the last meeting they discussed the possibility of raising rates... As mentioned, I viewed this as talking tough rather than any likely action.

I think Orr will continue to talk tough until they are ready to act. A skill he should have learned a lot earlier, rather than saying too much.

i agree he keep talking tough , although he must be starting to sweat that the economy heading over the cliff rapidly now.

[Leemsip]

employment and house prices havent really been smashed yet.... I guess they are both pretty slow moving so might play out over the next 18 months or so....

Salt Funds comment.........
"The key question for NZ investors to ask right now is how willeach stock fare when the OCR is suddenly cut by 50-100bp?We have been buying those names that should benefit, whileaccepting the risk that they may still have a little earnings riskstored up. At some point, our market will buy the lastdowngrade. We vividly remember how dreadful the recessionwas in 1990/91 but how strong the bull market was on theback of rate cuts in 1992/93."

Bull.... like you I have some bonds which will need selling early next year for huge profit so I can charge back into the sharemarket.....

[winner69]

i agree he keep talking tough , although he must be starting to sweat that the economy heading over the cliff rapidly now.

Media doing a good job promoting the economy going over the cliff and such things as .ore and more unpaid bills ....hope our Adrian doesn't watch the news or read those bank commentators reports...he'd be getting a misplaced view of the economy

[stoploss]

i agree he keep talking tough , although he must be starting to sweat that the economy heading over the cliff rapidly now.
He overshot it on the downside with .25 % OCR and was too timid to raise rates both fast enough and agressively to stop inflation.
It's no surprise he is overdoing it on the topside as well. They are not helped by using data that's 3 months out of date for their decisions .
They are always looking in the rear view mirror, when he should have daily data ( The banks have the EFTpos spend by the minute ) can't be that hard in an electronic age ....
So just like any commodity , or market in Boom or bust it overshoots and undershoots , the Governor is doing the same .....

[Daytr]

He overshot it on the downside with .25 % OCR and was too timid to raise rates both fast enough and agressively to stop inflation.
It's no surprise he is overdoing it on the topside as well. They are not helped by using data that's 3 months out of date for their decisions .
They are always looking in the rear view mirror, when he should have daily data ( The banks have the EFTpos spend by the minute ) can't be that hard in an electronic age ....
So just like any commodity , or market in Boom or bust it overshoots and undershoots , the Governor is doing the same .....

He did overshoot, but that's easy to say in hindsight when no one really knew what was coming with Covid.

He was also the first to raise rates & they were raised aggressively compared to the rest of the world, but his biggest mistake imo was the language he used. Go hard, go early so we can bring rates down again quickly.

The latter part of that statement meant banks weren't passing on the full extent of the rate increases and the 2 & 3 year rates weren't where they should have been. That in turn meant rates had to stay higher for longer.

He obviously wasn't to know the impact of Gabriele, China's very lagged Covid response that impacted supply chains or that the Labour Government would continue spending like no tomorrow.

Most of those things have now passed, and I would hope that would start enter his thinking, although if he's smart, keep shum until they want to act on rates.

He needed to take a leaf out of Greenspan's goblygook speak which was quite a deliberate attempt to confuse markets and no one would have any real idea what he was thinking.

[stoploss]

Hi Daytr "He was also the first to raise rates & they were raised aggressively compared to the rest of the world,"
This is a bit of misinformation , South Korea,Norway & the Czech republic beat him to it. When you say aggressively , initially they were only 25 point hikes . If 2.5 % was a neutral rate
back then he should have been hiking in bigger increments earlier to at least get it to a neutral rate.

[Ggcc]

https://www.interest.co.nz/economy/128521/some-economists-are-weighing-earlier-interest-rates-cuts-after-nzier%E2%80%99s-business

OCR maybe heading down by end of this year (this is what I felt for a while)…… Many have been saying this who talk to business owners on the regular

[Valuegrowth]

May be overvlaued assets could have sell-off. I don't have any overvalued stocks.

https://www.aliteq.com/jp-morgan-predicts-a-major-us-stock-market-crash/#google_vignette (https://www.aliteq.com/jp-morgan-predicts-a-major-us-stock-market-crash/#google_vignette)

JP Morgan predicts a major US stock market crash

[Valuegrowth]

Deleted the duplicate message.

[bull....]

Retail spending slump nearly surpassing '80s sharemarket crash
https://www.rnz.co.nz/news/business/521229/retail-spending-slump-nearly-surpassing-80s-sharemarket-crash

[bull....]

Global dairy prices fall to near three month low
https://www.rnz.co.nz/news/business/521145/global-dairy-prices-fall-to-near-three-month-low

might be a cut in pay for farmers soon

[Ggcc]

Retail spending slump nearly surpassing '80s sharemarket crash
https://www.rnz.co.nz/news/business/521229/retail-spending-slump-nearly-surpassing-80s-sharemarket-crash

Another reason to consider lowering OCR by the end of this year.

[winner69]

Retail spending slump nearly surpassing '80s sharemarket crash
https://www.rnz.co.nz/news/business/521229/retail-spending-slump-nearly-surpassing-80s-sharemarket-crash

Yep the media doing a great job on picking up and further sensationalising all the gloom and doom that economic commentators are coming up with.

The lady of TV1 news is one of the best at it.

Hope Adrian not listening and swayed into doing something rash

Meanwhile Rod Duke just getting on with it and doingnOK
https://www.nzherald.co.nz/business/weve-got-big-plans-rod-duke-on-why-briscoes-is-thriving-while-other-retailers-struggle-money-talks/LZ52SN5TA5EAJAJR76JVHIP2IY/

[kiora]

Rods a legend.
Quoted from Bill Gates
"Saving like a pessimist,investing like an optimist"

[winner69]

Things can’t be too bad in NZ as 760,000 going to fly over the school holidays.

According to NZ Herald …..Nearly half a million customers are set to fly on the domestic network, and a further 274,000 are headed overseas, the airline said.

[Aaron]

Retail spending slump nearly surpassing '80s sharemarket crash
https://www.rnz.co.nz/news/business/521229/retail-spending-slump-nearly-surpassing-80s-sharemarket-crash

This is great news. I wonder how much this helps our push to reduce carbon dioxide emissions.

[Rawz]

Things can’t be too bad in NZ as 760,000 going to fly over the school holidays.

According to NZ Herald …..Nearly half a million customers are set to fly on the domestic network, and a further 274,000 are headed overseas, the airline said.

is that good or bad? compared to....?

[winner69]

is that good or bad? compared to....?

Just that the bleating going on about the stuffed economy would suggest there’s no money to spend ……but hundreds of thousands can afford to flybaroundvduringbthevschool holidays ….and no doubt spend a fortune in places like Queenstown.

[Ggcc]

Just that the bleating going on about the stuffed economy would suggest there’s no money to spend ……but hundreds of thousands can afford to flybaroundvduringbthevschool holidays ….and no doubt spend a fortune in places like Queenstown.
There is always money around. My wife and I are off to Europe for a couple of months shortly.

[winner69]

There is always money around. My wife and I are off to Europe for a couple of months shortly.

Good on you ggcc …..haverá great time

[thegreatestben]

Just in Singapore airport after 6 weeks in Europe too. Boy it’s hot there!

[Rawz]

Just that the bleating going on about the stuffed economy would suggest there’s no money to spend ……but hundreds of thousands can afford to flybaroundvduringbthevschool holidays ….and no doubt spend a fortune in places like Queenstown.

Bleating? lol come on. Even King Duke said it is very very tough out there. All NZX co's (bar one or two) reporting is down and flying red warning flags..
Just need to take a walk down main street or your local mall to see vacancies. Go talk to the local cafe owner, or bookshop or florist or builder etc etc and ask them how things are going..

Maybe one last round of holidays for some living beyond there means. The middle class rolling over onto the new rates will drain the last reserves and then the economic hell will really kick in. Orr is going to be too slow to move so here comes the doom. Can hear the drums beating already.

Im talking the middle class and the small business owners which is the backbone of the country that are hurting. Not the top 10% of this country.

[Aaron]

Im talking the middle class and the small business owners which is the backbone of the country that are hurting. Not the top 10% of this country.

What will lower interest rates do to help?

[Rawz]

What will lower interest rates do to help?
Increases disposable income of course

[Daytr]

I've been looking at the JPY lately and it's come a very long way due to the interest rate yield differential. I've recently averaged a position at 161.510.

The NIKKEI has pretty much done the inverse of the currency in the last year or two & I have seen not so long ago a few big players talking up Japanese stocks.

I do wonder if buying now is more a currency play I.e they expect the JPY to strengthen once interest rates are cut in the US, or a more cynical view might be to entice buyers that they can sell into, to offload their position.

Either way I think the JPY could be a major mover once US rates start coming down.

[Aaron]

Increases disposable income of course

What for people with a mortgage?

What about people without a mortgage, won't you decrease their disposable income if you lower rates on their savings?

As I write this I guess people have larger mortgages than savings accounts or term deposits. I guess I need to understand a bank's balance sheet to appreciate what the economy is built on. Sounds like hard work.

[Daytr]

What for people with a mortgage?

What about people without a mortgage, won't you decrease their disposable income if you lower rates on their savings?

As I write this I guess people have larger mortgages than savings accounts or term deposits. I guess I need to understand a bank's balance sheet to appreciate what the economy is built on. Sounds like hard work.

Considering a bank only has to hold a certain percentage in deposits for the amount of lending they have, it suggests the amount of loans far exceeds the amount on deposit.

[Rawz]

What for people with a mortgage?

What about people without a mortgage, won't you decrease their disposable income if you lower rates on their savings?

As I write this I guess people have larger mortgages than savings accounts or term deposits. I guess I need to understand a bank's balance sheet to appreciate what the economy is built on. Sounds like hard work.

A lot of people with savings are older people 60+ This demographic dont spend much as they have it all.

The biggest spenders are 25-60 demographic. Thats were all the mortgages are.

[Aaron]

A lot of people with savings are older people 60+ This demographic dont spend much as they have it all.

The biggest spenders are 25-60 demographic. Thats were all the mortgages are.

So then zero % interest rates or negative interest rates would be best for the economy?

[moka]

According to the Perplexity AI search results, 32 percent of New Zealand households have a mortgage on their primary residence. This means that approximately one-third of homeowners in New Zealand are currently paying off a mortgage.

It's important to note that homeownership rates in New Zealand have been declining over the past few decades.
Home ownership peaked in the 1990s at 73.8 percent of households, but by 2018, it had fallen to 64.5 percent, and 55% in 2019. This decline in overall homeownership rates may impact the proportion of homeowners with mortgages.

The data also reveals some interesting trends related to mortgages and homeownership in New Zealand:
The median property debt has increased significantly in recent years, reaching $260,000 in the year ended June 2021, which is up $56,000 over the previous three years.

Among older New Zealanders (aged 65 and above), the percentage of those who are mortgage-free has decreased from 78% in 2007 to 72% in 2017. This suggests that more retirees are carrying mortgage debt into their retirement years.
The number of New Zealanders with mortgages past the age of 65 has risen by 15% since June 2018, from 118,000 to 136,000.

Only 38 percent of people between the ages of 55 and 64 are mortgage-free, indicating that a significant portion of pre-retirees are still paying off their homes.
These statistics highlight the changing landscape of homeownership and mortgage debt in New Zealand, with more homeowners carrying mortgage debt later in life and facing higher property debt levels overall.

https://www.stats.govt.nz/news/mortgages-and-other-real-estate-loans-drive-household-debt-up/
Total household debt increased 29 percent from the year ended June 2018 to the year ended June 2021, Stats NZ said.

https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership

[winner69]

Good stuff there moka …interesting

That home ownership rate decline is a bit of a worry

Home ownership rates started declining when RMA was introduced …message there somewhere

[moka]

The $25.2 billion mortgage debt hanging over Kiwis aged 65-plus

https://www.oneroof.co.nz/news/the-25-2-billion-mortgage-debt-hanging-over-kiwis-aged-65-plus-44076
(https://www.oneroof.co.nz/news/the-25-2-billion-mortgage-debt-hanging-over-kiwis-aged-65-plus-44076)
15% spike in the number of retirement-age homeowners still saddled with debt.
Since June 2018 the number of New Zealanders with mortgages past the age of 65 has risen 15% – from 118,000 to 136,000, according to data from credit bureau Centrix.

Even worse, is the 49% rise in total mortgage debt for over 65s in the same period, from $16.9 billion to $25.2bn.
The most recent figure, from June this year (2023), means that mortgage holders in the 65-plus age group have an average mortgage debt of $185,294.

While a third of homeowners in New Zealand are mortgage-free, the figures are a reminder that many Kiwis are likely to be heading into retirement saddled with sizeable mortgage debts.

McLaughlin says the trend has been partly driven by the higher cost of homes, failed marriages, and low interest rates over the past five years have made people more comfortable to take on debt than they might have been in the past. Back in the 1980s no one had mortgages over the age of 65, says McLaughlin. “You couldn’t get one. Nor could people extract money from their mortgages for consumer spending, or house renovations as they can now, says McLaughlin. Today over 65s have borrowed for a wide variety of reasons. “They are borrowing [against homes] to finance businesses, second homes, investment properties, beach houses. Lifestyle has changed.”

[Aaron]

Some might argue that the house price to income ratio was best when interest rates were highest. Haven't interest rates been dropping for 20-30years since then, while debt has been growing as a percentage of GDP or as Moka points out over 65s entering retirement with debt.

Wouldn't lower rates just exacerbate the house price and debt problem.

Maybe we should just wait for the CPI figures. That should still work for asset owners unless consumer prices are still going up while house and asset prices are stable/down. That would be a conundrum, I suppose the CPI figures could be fiddled.

Disclaimer I don't currently have any debt (appreciate this is not the way to get rich but I am a conservative investor/saver). How about you RAWZ? We might be selfishly arguing what is best for us personally but mostly I would like to see that my kids and grandkids are able to afford a house without taking debt into retirement.

[Ggcc]

https://www.nzherald.co.nz/business/more-hope-for-early-rate-cut-as-asb-economists-change-forecast/QI7RG7NRIRFOLCGZXD4PLHC354/

And another bank says things are tough. OCR should go down by end of this year, unless something silly happens.

[troyvdh]

Aaron...When interest rates were highest ...so was inflation.High inflation is great...it kills debt.

Assets like houses increased in value (in the 80s at least) insanely.

I could be wrong but I reckon taking on debt in a low inflation enviornment is well risky and could be considered as reckless.

[Valuegrowth]

According to the Perplexity AI search results, 32 percent of New Zealand households have a mortgage on their primary residence. This means that approximately one-third of homeowners in New Zealand are currently paying off a mortgage.

It's important to note that homeownership rates in New Zealand have been declining over the past few decades.
Home ownership peaked in the 1990s at 73.8 percent of households, but by 2018, it had fallen to 64.5 percent, and 55% in 2019. This decline in overall homeownership rates may impact the proportion of homeowners with mortgages.

The data also reveals some interesting trends related to mortgages and homeownership in New Zealand:
The median property debt has increased significantly in recent years, reaching $260,000 in the year ended June 2021, which is up $56,000 over the previous three years.

Among older New Zealanders (aged 65 and above), the percentage of those who are mortgage-free has decreased from 78% in 2007 to 72% in 2017. This suggests that more retirees are carrying mortgage debt into their retirement years.
The number of New Zealanders with mortgages past the age of 65 has risen by 15% since June 2018, from 118,000 to 136,000.

Only 38 percent of people between the ages of 55 and 64 are mortgage-free, indicating that a significant portion of pre-retirees are still paying off their homes.
These statistics highlight the changing landscape of homeownership and mortgage debt in New Zealand, with more homeowners carrying mortgage debt later in life and facing higher property debt levels overall.

https://www.stats.govt.nz/news/mortgages-and-other-real-estate-loans-drive-household-debt-up/
Total household debt increased 29 percent from the year ended June 2018 to the year ended June 2021, Stats NZ said.

https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership
Thank you for the information. Not a good sign. Do you think we should blame foreign property investors, speculators and migrants for this situation in some extent?

[Rawz]

Disclaimer I don't currently have any debt (appreciate this is not the way to get rich but I am a conservative investor/saver). How about you RAWZ? We might be selfishly arguing what is best for us personally but mostly I would like to see that my kids and grandkids are able to afford a house without taking debt into retirement.
I have a $1m mortgage and just refixed. Payments going from $5100 a month to $7150 a month. Yikes. But strong household income and decent pay rises saves our bacon. Plus the odd dividend.

Those 65+ with mortgages… honestly how the heck does that happen. What was the price of a house for them back in their 20s/30s?? $10,000 or something? How have they gone through life and grown their debt all the way to 65+?

The reverse mortgage product. What a wonderful thing.

[clip]

I have a $1m mortgage and just refixed. Payments going from $5100 a month to $7150 a month. Yikes. But strong household income and decent pay rises saves our bacon. Plus the odd dividend.

Those 65+ with mortgages… honestly how the heck does that happen. What was the price of a house for them back in their 20s/30s?? $10,000 or something? How have they gone through life and grown their debt all the way to 65+?

The reverse mortgage product. What a wonderful thing.

I guess if you are one couple that divorces/splits in your 50s that would quite easily become 2 people who have a mortgage into their 65+s

[moka]

Thank you for the information. Not a good sign. Do you think we should blame foreign property investors, speculators and migrants for this situation in some extent?
I did wonder about immigration, and then there are those on student visas, and temporary workers, in 2017 abut 300,000 people.

For the year ended January 2024, New Zealand experienced a record net migration gain of 133,800 people. This represents a significant increase of over 114% compared to the net migration of 62,469 recorded in 2017.
In the year ended September 2023, there was a provisional estimate of 237,100 (± 2,200) migrant arrivals, which was up 183% compared to the previous year.
For the 2016/17 financial year, New Zealand had a net gain of 72,300 permanent and long-term migrants, which was 4.7% higher than the previous year and the highest net gain recorded at that time.
The number of people approved for residence in 2016/17 was 47,684, which was an 8% decrease from the previous year.
As of June 30, 2017, there were 75,578 student visa holders present in New Zealand, which was a 1% decrease from the previous year.
Also as of June 30, 2017, there were 152,432 temporary workers present in New Zealand, which was a 16% increase from the previous year.
It's important to note that immigration figures can fluctuate significantly from year to year due to various factors, including policy changes, economic conditions, and global events. The most recent data shows a substantial increase in net migration, largely driven by arrivals from countries such as India, the Philippines, and Fiji.

[troyvdh]

Rawz..the reverse mortgage product how is it wonderful ?

% rates at 10 average.

[moka]

https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership
(https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership)
Today (2019), about 12% of people aged 65+ are still paying a mortgage, and the same number are renting.
They’re eligible for Superannuation, but Super wasn’t designed to cover rent – it currently pays $411 for a single person; $632 for a couple. At that rate, it assumes you have housing sorted. Should Super be changed to allow for more people in retirement still paying for housing, or is covering our housing cost up to us? Māori and Pasifika have fared the worst – today only 35% of Māori and 20% of Pasifika own their own homes.

[Baa_Baa]

https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership
(https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership)
Today (2019), about 12% of people aged 65+ are still paying a mortgage, and the same number are renting.
They’re eligible for Superannuation, but Super wasn’t designed to cover rent – it currently pays $411 for a single person; $632 for a couple. At that rate, it assumes you have housing sorted. Should Super be changed to allow for more people in retirement still paying for housing, or is covering our housing cost up to us? Māori and Pasifika have fared the worst – today only 35% of Māori and 20% of Pasifika own their own homes.

You post something from five years ago, please get with the times, all those numbers have changed.

[clearasmud]

I have a $1m mortgage and just refixed. Payments going from $5100 a month to $7150 a month. Yikes. But strong household income and decent pay rises saves our bacon. Plus the odd dividend.

Those 65+ with mortgages… honestly how the heck does that happen. What was the price of a house for them back in their 20s/30s?? $10,000 or something? How have they gone through life and grown their debt all the way to 65+?

The reverse mortgage product. What a wonderful thing.

I am 65 and the houses in my late 20's were 50k to 200k not 10k.
10k to 20k houses date from 1970 and were mostly sold to the pre ww2 generation.

[alokdhir]

I have a $1m mortgage and just refixed. Payments going from $5100 a month to $7150 a month. Yikes. But strong household income and decent pay rises saves our bacon. Plus the odd dividend.

Those 65+ with mortgages… honestly how the heck does that happen. What was the price of a house for them back in their 20s/30s?? $10,000 or something? How have they gone through life and grown their debt all the way to 65+?

The reverse mortgage product. What a wonderful thing.

Having a big mortgage is not a bad thing in this world if one can afford it ...ie incomes can manage its costs ...its forced savings while building a long term asset with great leverage ...it has win win everywhere . I remember when my son was looking for his first home I advised him to go all out ie extend his budget as much as Bank allowed ...still he got $ 1.4 million mortgage out of his $ 2 million limit ...but at 30 and as his first home ...its still great ...got refixed recently but not that big a change like yours +40% ...he has investments and mortgage too ...mortgage helps with leverage best and leads to prosperity faster then simple investments

But I reckon having mortgage when your working life is diminishing fast should be worry ...boils more to bad planning. then anything else

[winner69]

You post something from five years ago, please get with the times, all those numbers have changed.

Baabaa - Don’t be too critical of Moka

Most if thec stuff he’s provided was derived from the 2018 Census. Similar data from 2023 Census still not available.

Maybevyou can enlighten us what has changed so we can get with the times

[Daytr]

This only goes as far as 2017 but shows average houses prices over time an then adjusts for inflation. Quite interesting.

https://www.interest.co.nz/property/87961/adjusting-inflation-gains-house-prices-past-four-years-are-actually-nothing-special

[Aaron]

This only goes as far as 2017 but shows average houses prices over time an then adjusts for inflation. Quite interesting.

https://www.interest.co.nz/property/87961/adjusting-inflation-gains-house-prices-past-four-years-are-actually-nothing-special

Am I reading it right. It looks like house prices really took off not long after 2000 had a breather around 2008 and took off again?

Interesting to see the comments from Rawz and Alokdhir cheerleaders for rate cuts, helps to understand why they see cuts as the best way forward.

Fortunately, the economics geniuses have figured out austerity doesn't work and the way to fix a debt problem is with more debt. Daytr's link confirms this with house prices increasing exponentially every time interest rates are cut and money is printed. Hard to argue that cheap debt and large loans is not the way to wealth when confronted with the facts.

[Rawz]

Aaron, do you believe the economy is strong and small business is not struggling?

[Aaron]

Aaron, do you believe the economy is strong and small business is not struggling?

No I don't.

Do I think inflating house prices and assets and creating a "wealth effect" will make things better? Yes for some people but not for those without assets where inflation just makes life harder instead of better.

Perhaps interest rates are a little high, I guess you would need to check the CPI data and maybe allow for a lag to decide if rate cuts are necessary.

Do you think your wealth should come from central bank largesse?

[Rawz]

No I don't.

Do I think inflating house prices and assets and creating a "wealth effect" will make things better? Yes for some people but not for those without assets where inflation just makes life harder instead of better.

Perhaps interest rates are a little high, I guess you would need to check the CPI data and maybe allow for a lag to decide if rate cuts are necessary.

Do you think your wealth should come from central bank largesse?

All im saying, and this is what forums are for... is i am seeing a weak economy. It started earlier this year when i attended the Central Districts fieldays, it was tragic. When i talk to banks and finance companies about their new lending at lows.. when i talk to companies about their capex plans being zero.. I dont need to wait for the lag data to make my call on rates.

Its not just so i have lower monthly payments on my mortgage lol come on. Get out and talk to people and ask how they are going. Dont wait for some data to be released

[Aaron]

All im saying, and this is what forums are for... is i am seeing a weak economy. It started earlier this year when i attended the Central Districts fieldays, it was tragic. When i talk to banks and finance companies about their new lending at lows.. when i talk to companies about their capex plans being zero.. I dont need to wait for the lag data to make my call on rates.

Its not just so i have lower monthly payments on my mortgage lol come on. Get out and talk to people and ask how they are going. Dont wait for some data to be released

Fair enough times are tough and lower interest rates will help some people and stimulate some activity. As far as waiting for the data, I don't recall anyone screaming for a rate rise until the data came out after covid. Although easy times are always better than tough times.

You didn't answer my question though.

[Rawz]

Fair enough times are tough and lower interest rates will help some people and stimulate some activity. As far as waiting for the data, I don't recall anyone screaming for a rate rise until the data came out after covid. Although easy times are always better than tough times.

You didn't answer my question though.

My wealth will come from my PAYE salary and investment returns.

[Daytr]

Am I reading it right. It looks like house prices really took off not long after 2000 had a breather around 2008 and took off again?

Interesting to see the comments from Rawz and Alokdhir cheerleaders for rate cuts, helps to understand why they see cuts as the best way forward.

Fortunately, the economics geniuses have figured out austerity doesn't work and the way to fix a debt problem is with more debt. Daytr's link confirms this with house prices increasing exponentially every time interest rates are cut and money is printed. Hard to argue that cheap debt and large loans is not the way to wealth when confronted with the facts.

Yes you are reading it right. I remember sitting in Australia in the late 1990s early 2000s thinking how cheap NZ property was comparatively.
Some waterfront property was priced higher in 2007 than they would get now or thereabouts.

Then obviously the GFC struck.

I'm not sure when negative gearing was introduced, but I wouldn't surprise me if this coincided with the last 20 year explosion in prices, that and unsustainable levels of immigration.

[LaserEyeKiwi]

According to the Perplexity AI search results, 32 percent of New Zealand households have a mortgage on their primary residence. This means that approximately one-third of homeowners in New Zealand are currently paying off a mortgage.

It's important to note that homeownership rates in New Zealand have been declining over the past few decades.
Home ownership peaked in the 1990s at 73.8 percent of households, but by 2018, it had fallen to 64.5 percent, and 55% in 2019. This decline in overall homeownership rates may impact the proportion of homeowners with mortgages.

The data also reveals some interesting trends related to mortgages and homeownership in New Zealand:
The median property debt has increased significantly in recent years, reaching $260,000 in the year ended June 2021, which is up $56,000 over the previous three years.

Among older New Zealanders (aged 65 and above), the percentage of those who are mortgage-free has decreased from 78% in 2007 to 72% in 2017. This suggests that more retirees are carrying mortgage debt into their retirement years.
The number of New Zealanders with mortgages past the age of 65 has risen by 15% since June 2018, from 118,000 to 136,000.

Only 38 percent of people between the ages of 55 and 64 are mortgage-free, indicating that a significant portion of pre-retirees are still paying off their homes.
These statistics highlight the changing landscape of homeownership and mortgage debt in New Zealand, with more homeowners carrying mortgage debt later in life and facing higher property debt levels overall.

https://www.stats.govt.nz/news/mortgages-and-other-real-estate-loans-drive-household-debt-up/
Total household debt increased 29 percent from the year ended June 2018 to the year ended June 2021, Stats NZ said.

https://retirement.govt.nz/policy-and-research/retirement-income-policy-review/2019-review-of-retirement-income-policies/home-ownership

Have you actually fact checked this, or are these figures just a bunch of LLM hallucinations?

Ai is fairly useless unless its fact checked manually (which makes the AI of dubious value in the first place for fact based collection)

[LaserEyeKiwi]

No I don't.

Do I think inflating house prices and assets and creating a "wealth effect" will make things better? Yes for some people but not for those without assets where inflation just makes life harder instead of better.

Perhaps interest rates are a little high, I guess you would need to check the CPI data and maybe allow for a lag to decide if rate cuts are necessary.

Do you think your wealth should come from central bank largesse?

Interest rates aren’t particularly high, especially in historical context - but anyone who bought property with a mortgage during the last 15 years has done so at ridiculously high debt-to-income levels. It’s no surprise that the countries feeling the pain the most from high interest rates are the same countries that let their housing markets run away to ridiculous levels (NZ/AUS/Canada etc). It’s extremely predictable that mortgage holders with heavy debt to income loads would heavily curtail discretionary spending when interest rates rose.

Whereas look at the USA which had comparatively lower house price insanity, and its economy is ticking along fine with current higher interest rates.

[Bobdn]

Property needs to drop another by 50 per cent around the country. Apart from the last 20 years, real estate has always been a sub par investment. In the 20th century, it barely kept up with inflation.

Houses need to be seen as consumption again, not an investment.

We need higher rates for longer. The piper, as always, has to be paid.

Edit: I don't know what that last sentence means in the context of my comment but it feels right.

[Daytr]

Property needs to drop another by 50 per cent around the country. Apart from the last 20 years, real estate has always been a sub par investment. In the 20th century, it barely kept up with inflation.

Houses need to be seen as consumption again, not an investment.

We need higher rates for longer. The piper, as always, has to be paid.

Edit: I don't know what that last sentence means in the context of my comment but it feels right.

Well that won't happen and thank goodness it won't.

Agree re investment vs consumption though, but until we put in a CGT this ain't going to happen.

[causecelebre]

Interest rates aren’t particularly high, especially in historical context - but anyone who bought property with a mortgage during the last 15 years has done so at ridiculously high debt-to-income levels. It’s no surprise that the countries feeling the pain the most from high interest rates are the same countries that let their housing markets run away to ridiculous levels (NZ/AUS/Canada etc). It’s extremely predictable that mortgage holders with heavy debt to income loads would heavily curtail discretionary spending when interest rates rose.

Whereas look at the USA which had comparatively lower house price insanity, and its economy is ticking along fine with current higher interest rates.

The US has 30 year mortgages so many homeowners refi'd when interest rates were sub 3% and are hanging on to that rate. It explains why they are having a supply deficit. Homeowners are reluctant to move to avoid incurring the new rates

[Bikeguy]

Interest rates aren’t particularly high, especially in historical context - but anyone who bought property with a mortgage during the last 15 years has done so at ridiculously high debt-to-income levels. It’s no surprise that the countries feeling the pain the most from high interest rates are the same countries that let their housing markets run away to ridiculous levels (NZ/AUS/Canada etc). It’s extremely predictable that mortgage holders with heavy debt to income loads would heavily curtail discretionary spending when interest rates rose.

Whereas look at the USA which had comparatively lower house price insanity, and its economy is ticking along fine with current higher interest rates.

Well said, this sums it up nicely I feel…

[Valuegrowth]

Markets are hitting all time high after the UK election. Pound is in bullish mood too. There's always a bull market somewhere.

https://www.reuters.com/world/uk/pound-steady-after-labour-set-win-big-uk-election-2024-07-04/

[Daytr]

Interest rates aren’t particularly high, especially in historical context - but anyone who bought property with a mortgage during the last 15 years has done so at ridiculously high debt-to-income levels. It’s no surprise that the countries feeling the pain the most from high interest rates are the same countries that let their housing markets run away to ridiculous levels (NZ/AUS/Canada etc). It’s extremely predictable that mortgage holders with heavy debt to income loads would heavily curtail discretionary spending when interest rates rose.

Whereas look at the USA which had comparatively lower house price insanity, and its economy is ticking along fine with current higher interest rates.

Look at Government debt around the world.
It has exploded particularly in the US in the last 20 years. NZ comparative to our OECD peers isn't too bad.

There is a reason why Japan has had ultra low interest rates for decades, their Government can't afford otherwise, the US are heading the same way.

[Valuegrowth]

Property needs to drop another by 50 per cent around the country. Apart from the last 20 years, real estate has always been a sub par investment. In the 20th century, it barely kept up with inflation.

Houses need to be seen as consumption again, not an investment.

We need higher rates for longer. The piper, as always, has to be paid.

Edit: I don't know what that last sentence means in the context of my comment but it feels right.

Highly unlikely unless there's a market crash. One is due but cannot predict when it will happen. History will repeat in a different manner.

Remember The 2008 crash and Black Monday 1987?

https://www.history.com/news/2008-financial-crisis-causes

[Valuegrowth]

https://www.reuters.com/world/uk/pound-steady-after-labour-set-win-big-uk-election-2024-07-04/

British assets gain, mid-cap stocks lead after Labour election win

[Valuegrowth]

https://www.ft.com/content/d77efd31-d08e-4c4f-b6dc-0c0eda59bb2a

Frontier emerging markets stocks soar as investors cheer reforms

[troyvdh]

Datyr re CGT.Are you saying that countries with CGT havent experienced a rapid rise in residential house prices ?.

[Daytr]

Datyr re CGT.Are you saying that countries with CGT havent experienced a rapid rise in residential house prices ?.

Not as rapid as NZ I would suggest.
A CGT is just one factor of course, rampant unsustainable immigration is probably a bigger factor.

At least with a CGT perhaps more infrastructure could be funded to support the building of more houses. Anyhoo, enough of the politics.

[Panda-NZ-]

Ireland and Spanish property bubbles.. how many similarities are there with NZ?

[Bjauck]

Ireland and Spanish property bubbles.. how many similarities are there with NZ? I don’t know about Spain but there are lots of differences from Ireland. Ireland had multinationals basing themselves there and fast GDP growth. It had joined the Euro and the European Central Bank had lower interest rates than Ireland would otherwise have had. So low interest rates were leveraged on top of rapidly burgeoning GDP growth and incomes. German Banks had also lent large amounts of money to the Celtic Tiger. Irish property was well-inflated.

[Daytr]

I don’t know about Spain but there are lots of differences from Ireland. Ireland had multinationals basing themselves there and fast GDP growth. It had joined the Euro and the European Central Bank had lower interest rates than Ireland would otherwise have had. So low interest rates were leveraged on top of rapidly burgeoning GDP growth and incomes. German Banks had also lent large amounts of money to the Celtic Tiger. Irish property was well-inflated.

From memory Spain's property boom bust was largely driven by the Brits etc buying holiday homes there. I remember talking to one Pom a few years ago and he was still sitting on a 50% loss from 2008.

[Daytr]

I don’t know about Spain but there are lots of differences from Ireland. Ireland had multinationals basing themselves there and fast GDP growth. It had joined the Euro and the European Central Bank had lower interest rates than Ireland would otherwise have had. So low interest rates were leveraged on top of rapidly burgeoning GDP growth and incomes. German Banks had also lent large amounts of money to the Celtic Tiger. Irish property was well-inflated.

Ireland offered massive tax discounts to attract those multinationals. Not sure why the rest of Europe stood for it.

[kiora]

"The Future Fund likens the current era to the 1930s. Where is the best place to hide?"

https://www.livewiremarkets.com/wires/the-future-fund-likens-the-current-era-to-the-1930s-where-is-the-best-place-to-hide?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Saturday%206%20July%202024&utm_content=Trending%20on%20Livewire%20-%20Saturday%206%20July%202024+CID_cc5889ac2102cedb 54ee0faeb4803c86&utm_source=campaign%20monitor&utm_term=ACCESS%20THE%20INSIGHTS

"Buying Index Puts are value destroying"

[Daytr]

"The Future Fund likens the current era to the 1930s. Where is the best place to hide?"

https://www.livewiremarkets.com/wires/the-future-fund-likens-the-current-era-to-the-1930s-where-is-the-best-place-to-hide?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Saturday%206%20July%202024&utm_content=Trending%20on%20Livewire%20-%20Saturday%206%20July%202024+CID_cc5889ac2102cedb 54ee0faeb4803c86&utm_source=campaign%20monitor&utm_term=ACCESS%20THE%20INSIGHTS

"Buying Index Puts are value destroying"

That's interesting thanks for sharing.
Yeah buying Puts, the time decay can kill you.
As the article mentions, equities actually do well during wars it might be better to buy Calls.

If things go to he'll in a hand basket, typically everything gets sold, as margin calls hit players cash reserves, and the dollar rises.
In 2008, gold lost around 30% and then went on to triple.

There are certainly parallels to the 1930s for sure which is scary and it's scary that we have people in NZ that are supporting those extreme right wing nut jobs.

[winner69]

No worries …things going to be good soon ..if not very good.

Luxon said the other day -

“I am expecting interest rates to very quickly be lowered as a result and get the economy moving and get employment growing as well,"

[Valuegrowth]

Dropping interest rates is good as well as bad. Good for borrowers and homeowners. Bad thing is it could lead to next bubble as assets prices are historically high. I like safe heavens in stocks and commodities now. Completely out from hot stocks of today. There are so many crises like retirement crisis, debt crisis and geopolitical issues have not resolved completely. Anyway, hitting all time high again and again means we could see all time low next as the cycle repeats.

[kiora]

Dropping interest rates is good as well as bad. Good for borrowers and homeowners. Bad thing is it could lead to next bubble as assets prices are historically high. I like safe heavens in stocks and commodities now. Completely out from hot stocks of today. There are so many crises like retirement crisis, debt crisis and geopolitical issues have not resolved completely. Anyway, hitting all time high again and again means we could see all time low next as the cycle repeats.

Don't let a good crisis go to waste :)

Listen to the noise,feel the fear :)

[Valuegrowth]

Don't let a good crisis go to waste :)

Listen to the noise,feel the fear :) Thank you Kiora. I got the message.

[Valuegrowth]

https://www.youtube.com/watch?v=EC3CCt3NXWc

[winner69]

Sahm Rule about to be triggered in US

[Valuegrowth]

Sahm Rule about to be triggered in US Is recession ahead? Magnificent 7 is not listening to bad news.

[Valuegrowth]

https://www.youtube.com/watch?v=slAYBm6RiXg

[clip]

Sahm Rule about to be triggered in US

Interesting, had never heard of this before. Will keep an eye on it thanks.. given it's 0.43 is there a number where it's actually triggered? Is it above 1? Interesting it's slowly increasing and not sharply increasing like prior to previous crashes/recessions

https://fred.stlouisfed.org/series/SAHMREALTIME

[winner69]

Interesting, had never heard of this before. Will keep an eye on it thanks.. given it's 0.43 is there a number where it's actually triggered? Is it above 1? Interesting it's slowly increasing and not sharply increasing like prior to previous crashes/recessions

https://fred.stlouisfed.org/series/SAHMREALTIME

Answer is in the article linked

[alokdhir]

•

Last week we changed our OCR forecast (https://links.mail.asb.co.nz/els/v2/amGGCrdG08B_/dDdNcmVaZ2lVRzk5Q1RzUkMzb1VDSXJBdkJyb09KMmkwU25lTG dzTlN1ZVZzNFFHb0hNbVBxN0FTR3pzZG0vK3pPWWNJQ1FHRjVY RTJ0V05BYmFMdXFIMENWNHo3SElQKzlSL0xRZGw0Vmc9S0/MmtvcThTTUNGdHhOYlVXRHhwTU1ISk5FaVdmSFFJZ0Z6Q090cV Rjb1V2cVB4N1l5OXExZVhKSTF6T0x6UGozc1QxSHdsT3pnSmYv U0hOd3FmTDFublE9PQS2) and now expect the RBNZ will start cutting the OCR from November this year, by 25bp



•

In recent weeks our commentary had started to flag that the risks were tilting to an earlier cut than our February 2025 forecast



•

And last week the weights tipped more heavily to the earlier start









A decisive development for us was the NZIER’s Quarterly Survey of Business Opinion (https://links.mail.asb.co.nz/els/v2/Pw66F328D6Q7/dDdNcmVaZ2lVRzk5Q1RzUkMzb1VDSXJBdkJyb09KMmkwU25lTG dzTlN1ZVZzNFFHb0hNbVBxN0FTR3pzZG0vK3pPWWNJQ1FHRjVY RTJ0V05BYmFMdXFIMENWNHo3SElQKzlSL0xRZGw0Vmc9S0/MmtvcThTTUNGdHhOYlVXRHhwTU1ISk5FaVdmSFFJZ0Z6Q090cV Rjb1V2cVB4N1l5OXExZVhKSTF6T0x6UGozc1QxSHdsT3pnSmYv U0hOd3FmTDFublE9PQS2). It is pointing to increasing risk of the economy tipping back into recession. The activity indicators softened, with reported trading activity for Q2 slipping deeper into contractionary territory and expectations for the following quarter negative. Notably, employment and investment intentions dropped back to levels similar to late 2022, when GDP contracted at its greatest pace in the current slowdown. And the current level for investment intentions is also not that much above 2008 Global Financial Crisis and 2020 pandemic lows. These measures increasingly show that businesses are responding to the pressures they are coming under from weak household demand as well as the varying cost and debt-servicing pressures they have been grappling with.

Now hopefully RBNZ wont mess it up by delaying the positive signal to market and businesses !!!

[winner69]

NZIER Shadow Board views shown below

Economists seem to be saying that OCR will probably be lower in a years time …but could still be quite high.

Hope Adrian doesn’t mess it up by taking heed of these gurus and going too early. Might even a pnother increase to sort things out once and for all

Image curtesy of my mate Michael

[Valuegrowth]

NZIER Shadow Board views shown below

Economists seem to be saying that OCR will probably be lower in a years time …but could still be quite high.

Hope Adrian doesn’t mess it up by taking heed of these gurus and going too early. Might even a pnother increase to sort things out once and for all

Image curtesy of my mate MichaelMost probably
Rate cut may come next year in both NZ and Australia.. Both NZD and AUD should stay strong rest of the year.

[alokdhir]

NZIER Shadow Board views shown below

Economists seem to be saying that OCR will probably be lower in a years time …but could still be quite high.

Hope Adrian doesn’t mess it up by taking heed of these gurus and going too early. Might even a pnother increase to sort things out once and for all

Image curtesy of my mate Michael

I am sure u like all Gurus understand rates work with lag thats why took long to work and will take long to do otherwise too ...if he delays or does what u suggesting then all will go downhill faster then we all can imagine ...Nov is right at present to actually pivot and July meeting is best to start sounding markets about his intentions ...but how it will happen only God knows ...U sure are in throw the baby with water camp ...who wants one more hike ...lol

[Rawz]

C(down lots)+I(down)+G(down)+(X-M)= rate cut

[winner69]

Kelly at Westpac and reckons hawkish update from RBNZ this week

[Daytr]

Kelly at Westpac and reckons hawkish update from RBNZ this week

I expect further tough talk so they can bring rates down quicker

[sb9]

Don’t think Orr will giveaway anything, it’ll be usual hawkish tone until they get inflation within target range.

[alokdhir]

Thats how one gets hard landings ...but its better for Governors to err on side of caution then prudence ...Did he start raising rates when green shoots of inflation were all over ...no he waited and let the genie out fully before even thought of doing anything ...similarly he will surely wait till unemployment has reached 5% plus and he gets his surety that enough pain caused to kill inflation as well as many businesses ....but its always be sure then not ...as he is not trying to win any elections but trying to leave a legacy :cool:

[Valuegrowth]

I expect further tough talk so they can bring rates down quicker

I expected rate cut by the end of this year. Now I reasonably expect it to happen in 2025.One of my mortgages is expiring in September 2024. I have a plan B for it now. I thought why not I find investment which are going to benefit from high rates. Accordingly, I parked my money in cash rich companies.

https://www.forbes.com/advisor/au/personal-finance/inflation-rate-australia/

June 27: August Rate Rise 'On the Cards'

High interest rates are good for certain types of businesses. Companies with large cash investments and with positive cash flow will benefit. Their return on investment will increase. Companies with high debt will have a tough time. Naturally, their cost of doing business will go up. Even during high interest environment there are opportunities in the stock market.

[bull....]

Don’t think Orr will giveaway anything, it’ll be usual hawkish tone until they get inflation within target range.

yep needs to crush economy some more with hawkish talk. but as always be aware of the ORR surprise.

anyway US cpi this week probably of more importance for int rates in NZ

[Swala]

Thats how one gets hard landings ...but its better for Governors to err on side of caution then prudence ...Did he start raising rates when green shoots of inflation were all over ...no he waited and let the genie out fully before even thought of doing anything ...similarly he will surely wait till unemployment has reached 5% plus and he gets his surety that enough pain caused to kill inflation as well as many businesses ....but its always be sure then not ...as he is not trying to win any elections but trying to leave a legacy :cool:

Or maybe he's just trying to do his job.....

[alokdhir]

Or maybe he's just trying to do his job.....

Was he doing his job when inflation was shooting up ...rates have big lags ...all know ...he shud know better if he is good at his job

[winner69]

RetailWatch report June sales in NZ were 8% down on June last year

Of note -

Department stores down 21%
Clothing/Footwear down 16%
Furniture/Appliances/Homeware down 12%

Online and Instore down about the same ...but Online Domestic down more than Online Offshore

[Valuegrowth]

RetailWatch report June sales in NZ were 8% down on June last year

Of note -

Department stores down 21%
Clothing/Footwear down 16%
Furniture/Appliances/Homeware down 12%

Online and Instore down about the same ...but Online Domestic down more than Online Offshore
Dear W69
Did you identify companies which can perform well while reducing debt load in their books? It's always good to buy when they are out of favour. Currently, I have kept few stocks on my radar. Also it's good to find out next hot commodities and take positions before others come as droves. IMO coming sell-0ff in assets will get opportunities for intelligent investors. For my portfolio Interst rates is irrelevant. High Interst rates is very good for my portfolio. Thanks.

[workingdad]

RetailWatch report June sales in NZ were 8% down on June last year

Of note -

Department stores down 21%
Clothing/Footwear down 16%
Furniture/Appliances/Homeware down 12%

Online and Instore down about the same ...but Online Domestic down more than Online Offshore

Out and about yesterday and there’s sales everywhere, retail in every store I followed the wife into and new cars with big discounts in brands not known for big doscounts. Typically after dropping 6 figure on a new one in May haha but even then they were doing reasonable deals. I think the economy stats will go a lot further south yet

[Toddy]

Out and about yesterday and there’s sales everywhere, retail in every store I followed the wife into and new cars with big discounts in brands not known for big doscounts. Typically after dropping 6 figure on a new one in May haha but even then they were doing reasonable deals. I think the economy stats will go a lot further south yet

The best car deals are the third third third at zero percent interest. Match the cashflow with depreciation expense, GST back etc. I negotiate that every time. If they don't do that then no deal.

Economy. The hurt is real, that's for sure. But I'm not going to have sympathy for cars salesman doing it tough. They have had a very good run through the last economic cycle.

[winner69]

Are Aussies pretty thick or just down in the dumps.

From latest Consumer Confidence Survey - Rate rise expectations post big jump – 60% now expect higher rates.your

[Valuegrowth]

Even if they take decision to cut rates it will be marginal and gradual. At least it may take 3 to 5 years to drop below 4%. Don't expect massive cut.

[Valuegrowth]

Are Aussies pretty thick or just down in the dumps.

From latest Consumer Confidence Survey - Rate rise expectations post big jump – 60% now expect higher rates.your

There will be winners and losers if NZD and AUD appreciate sharply. Large commodity exporters can get hit. Earnings from the tourism sector too will drop.

https://www.forex.com/ie/news-and-analysis/australian-dollar-forecast-audusd-breaks-out-tests-2024-high/

AUD/USD Key Points



AUD/USD is benefitting from speculation about another interest rate hike from the RBA after a higher-than-expected CPI report and strong retail sales figure.
With little on the Australian economic calendar this week, AUD/USD traders’ focus will be on US developments.
For AUD/USD bulls, the ideal setup would be a controlled dip back to previous-resistance-turned-support near 0.6700 to allow a secondary entry on a retest of the breakout level

[bull....]

j powell says he's aware of downside risks. first hint of maybe cut coming soon.

[bull....]

you should check out these deep value plays im into

DRO.ASX
ELS.ASX

the future

anyone get into these

dro up nearly 100% now in just over a mth , els moving but get there i reckon on an update i reckon :t_up:

[Rawz]

anyone get into these

dro up nearly 100% now in just over a mth , els moving but get there i reckon on an update i reckon :t_up:

I had a look at the time. Thought they were expensive. Guess very expensive now lol

[bull....]

november might be in play for first rate cut. my take on RBNZ

[alokdhir]

november might be in play for first rate cut. my take on RBNZ

Can I say I was the one who said so in March ...SR made fun of my expectations ...lol

[bull....]

Can I say I was the one who said so in March ...SR made fun of my expectations ...lol

yes we both right :t_up: hope your loading up on bonds

[alokdhir]

yes we both right :t_up: hope your loading up on bonds

My bond is KFL ...:D

[Toddy]

Now there is head room for the Nzd to crap itself so the hard working exporters (the country earners) can clean up.

Everyone has their turn in the sun.

[alokdhir]

NZ10Y down 10 bps after hearing RBNZ ...market also thinks RBNZ preparing it for cuts in near future ...NZX shud become buoyant now for some years ahead

[workingdad]

The best car deals are the third third third at zero percent interest. Match the cashflow with depreciation expense, GST back etc. I negotiate that every time. If they don't do that then no deal.

Economy. The hurt is real, that's for sure. But I'm not going to have sympathy for cars salesman doing it tough. They have had a very good run through the last economic cycle.

Or use a 1% loan from bank for PHEV and invest for 3 years and get cash discount in car purchase :)

[winner69]

NZ10Y down 10 bps after hearing RBNZ ...market also thinks RBNZ preparing it for cuts in near future ...NZX shud become buoyant now for some years ahead

Poor Adrian …feeling the pressure from bank economists and the media and saying and doing things he doesn’t really want to

Should have increased today and talked hawkish

The lady on OneNews tonight will be really excited …going to be a must watch

[alokdhir]

Poor Adrian …feeling the pressure from bank economists and the media and saying and doing things he doesn’t really want to

Should have increased today and talked hawkish

The lady on OneNews tonight will be really excited …going to be a must watch

I think u physically in NZ but heart and mind in Australia ...lol

[winner69]

Brad Olsen sums it up nicely -

Change in tone, or more a complete flip flop from last time’s “the Committee discussed the possibility of increasing the OCR”.

Yeah but who do you believe? RBNZ in May? RBNZ in July? Can’t wait to see what might come out in August (a 50bp hike expectation would be consistent with how much they dart around!). It’d be useful if they could explicitly say “we shifted from a possible hike because XYZ”

(To be clear, I’m being silly with the 50bp hike expectation - but jeez is it hard to know what RBNZ MPC you get on any given day)

[Toddy]

Queue 'Shaza' for her insights.

[winner69]

Seems lots of ‘risk’ …makes you wonder whether the RBNZ really understands the difference between a ‘risk’ and an ‘issue’. This from theirvreview -

The Committee discussed the balance of risks to the inflation outlook. Members noted a risk that domestically driven inflation could be more persistent in the near term. However, there is also a risk that price setting behaviour and inflation expectations could normalise more rapidly as headline inflation declines.

Members discussed risks to the economic outlook stemming from Government policy. They discussed the challenge of delivering fiscal consolidation. In addition, some members noted that Government regulatory reforms may affect pricing behaviour in several sectors and the productive capacity of the economy. The net impact of these policies remains uncertain.

[winner69]

Queue 'Shaza' for her insights.

The RBNZ left the OCR at 5.50% but acknowledged evolving risks. Next week's CPI data will be a crucial input into the question of when OCR cuts come. t.ly/oaAzA

https://eu.watermarker.singletrack.io/RBNZ_MPR_Review_watch_this_space.pdf?data=DhZAW5pN irsgovBdALYwogjcrWZAB6DXgwQPV%2F%2FR4Y8c2U5HXzipnP njShFNDgLRga0%2Fl4fXY0u7%2BiuK0FSiPf3f8DqlXlWyAWUB t2mmlUc4hC0MEqYm4FXRGpBJciztBIgcQbJ81vjJn3qnhQdhlO l8l2F4MqOU4YGVYAA%2BcrHvImR4j0sBs2XP76BFSXtA%2F9UJ TepsL8iJj0CQdqr11Lg8IuoMaoPobL5awwa2hdVMmTfjIryE0L 6eGkf03o2imbWP4B7oDmOtk%2FwN89x2b6iTerXJpC8bC47tOC 4SCa55wNHlW0kSth55es6881l1XrZ1P02vF1lhzS2fG%2B8fS% 2FTJ7GlHYVOpHsSb%2Beci16HcyLrZxe7Mb%2Bw4Wa%2BrZV3N hzSwqlbAjSpxOVXmLqB5rUVIeetBvv22i16JoCh447zdOFn9KP niiM05fQxtkPEU6CoKvGJJPVVjB42RskNtxRnoUhW%2FuUehpo S%2FOMJ3eNk1B3KElSzlmrRzklQaS%2FTCBOD6hNH1O0gtIKYQ 55jZgxQ%2BRStaxz%2FbzIlZcEqKFc8zSll4APEEgE1kxXl6Rs 1WUWZaayf5%2FXcwN1K9va0lWY3kRx0TC4tn6GuffTkGOn0o1O qiYXOGDw57JCikROo%2FsYoaSnCAlzO6lpJ3b3UpFN8QC3wiDD h7XA9Lz3iuO7txNbWa1mTfObtWcr53jrl%2FMGqP%2BIonMiSS S8O2hIJHxXFWSGaDDAtAcrIROn8EKc%2B7pnLhOL3w5kE10a8i LNlHUeqSiG7iuJ85TU2ylj1Aj6Zwdndlg6h2FNLuebK8VG2osX d%2Fvjum%2Fv3Bq9gqpUgtWpmPrvLRJOgab7qSnJX7FQ%3D%3D&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FRBNZ_MPR_Review_watch_this_space .pdf%3FX-Amz-Signature%3D5f6d4263555f85e11c3f7207ad784219880177 f2b337430f95a04374c58bf8c8%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAW3DTAMO2PNZSGZ3G%252F20240710%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20240710T033500Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[Toddy]

Or use a 1% loan from bank for PHEV and invest for 3 years and get cash discount in car purchase :)

I like your thinking.

[winner69]

NZ10Y down 10 bps after hearing RBNZ ...market also thinks RBNZ preparing it for cuts in near future ...NZX shud become buoyant now for some years ahead

NZ10Y looks like it fell off a cliff eh

[Jaa]

NZ10Y looks like it fell off a cliff eh

8bps is a pretty small cliff, reckon Mr Bond will survive.

[winner69]

8bps is a pretty small cliff, reckon Mr Bond will survive.

Chart look dramatic though eh

Yep Mr Bond might be higher at end of week

[winner69]

Big headline in RBNZ …..brave call ..but sucked everybody in and made them happy


OCR 5.50% - Inflation Approaching Target Range

[alokdhir]

The RBNZ kept the OCR unchanged at 5.5%, as was universally expected



•

There were plenty of early signs that the RBNZ is starting to eye up data for when it should cut the OCR



•

We are confident the RBNZ will cut in 2024, in November by 25bp at the least if not earlier or bigger

[Jaa]

Chart look dramatic though eh

Yep Mr Bond might be higher at end of week

Looks like Mr Bond lives a pretty normal life to me...

15182

[Daytr]

Seems like Orr hasn't learned his lesson about saying too much.
Will banks now start reducing their mortgage rates further ahead of what Orr has indicated?

[Panda-NZ-]

Doing some browsing on seek australia (looking at my options) and there are some roles where they manage things on behalf of NZ companies even from Australia (finance, payroll, accounting, IT etc). So to a small extent NZ jobs are actually being shifted over there.

Your payroll may be done by someone in sydney.

[Valuegrowth]

Big headline in RBNZ …..brave call ..but sucked everybody in and made them happy


OCR 5.50% - Inflation Approaching Target Range

https://www.1news.co.nz/2024/07/10/reserve-bank-holds-ocr-at-55-once-again/

"In the March quarter of 2024, non-tradeable inflation was measured at 5.8%, and 5.9% in the quarter of December 2023, and was at 6.3% in the quarter prior.

This more stubborn inflation means the RBNZ will likely not cut the OCR for some time.

ANZ (https://www.1news.co.nz/2024/06/27/anz-says-significant-falls-in-interest-rates-ahead/)and Westpac both forecast a downward change in the OCR in early 2025, while RBNZ internal tracking predicted it won’t go down until the second half of 2025.

Last week ASB (https://www.1news.co.nz/2024/07/04/early-christmas-asb-revises-forecast-for-official-cash-rate-cut/) revised its forecast for downward movement in the OCR from February 2025 to November this year."

[Baa_Baa]

Regardless of whether the OCR cuts are later this year or early next year, concensus appears to be that rates will be cut as inflation tracks down to the target band of 1-3%.

The equities market being forward looking will start pricing in these cuts to OCR in anticipation. Inflation prone equities that have taken a beating will bottom out and SP's will start their recovery, some already have.

The point for a retail investor, is to stay ahead of the curve in revaluations. Monitor your favourite equities market price performance and don't let the recession go to waste, get in or get some more while they're massively discounted, and enjoy the capital gains upside to come.

[stoploss]

https://www.1news.co.nz/2024/07/10/reserve-bank-holds-ocr-at-55-once-again/

"In the March quarter of 2024, non-tradeable inflation was measured at 5.8%, and 5.9% in the quarter of December 2023, and was at 6.3% in the quarter prior.

This more stubborn inflation means the RBNZ will likely not cut the OCR for some time.

ANZ (https://www.1news.co.nz/2024/06/27/anz-says-significant-falls-in-interest-rates-ahead/)and Westpac both forecast a downward change in the OCR in early 2025, while RBNZ internal tracking predicted it won’t go down until the second half of 2025.

Last week ASB (https://www.1news.co.nz/2024/07/04/early-christmas-asb-revises-forecast-for-official-cash-rate-cut/) revised its forecast for downward movement in the OCR from February 2025 to November this year."
Hi Value G , the RBNZ is not mandated to keep “ Non tradeable” inflation in the band .
So if we get a low CPI print next week , by the time they update the Aug MPS numbers a cut in Nov can be on the cards . The wholesale interest rate market certainly took things considerable lower post the OCR update today .

[winner69]

RB headline yesterday - Inflation Approaching Target Range

Adrian must have heads up from Stats NZ

Stats NZ headline next week CPI falls to 3.5%

And don’t overlook what Baa_Baa said -

The point for a retail investor, is to stay ahead of the curve in revaluations. Monitor your favourite equities market price performance and don't let the recession go to waste, get in or get some more while they're massively discounted, and enjoy the capital gains upside to come.

[alokdhir]

RB headline yesterday - Inflation Approaching Target Range

Adrian must have heads up from Stats NZ

Stats NZ headline next week CPI falls to 3.5%

And don’t overlook what Baa_Baa said -

The point for a retail investor, is to stay ahead of the curve in revaluations. Monitor your favourite equities market price performance and don't let the recession go to waste, get in or get some more while they're massively discounted, and enjoy the capital gains upside to come.

When I say its time to invest for future during deep downtrends ....then U call me ramper ...and overenthusiastic ...perma bull ...what not ...lol

[bull....]

RB headline yesterday - Inflation Approaching Target Range

Adrian must have heads up from Stats NZ

Stats NZ headline next week CPI falls to 3.5%

And don’t overlook what Baa_Baa said -

The point for a retail investor, is to stay ahead of the curve in revaluations. Monitor your favourite equities market price performance and don't let the recession go to waste, get in or get some more while they're massively discounted, and enjoy the capital gains upside to come.

when will corporate earnings bottom ? int rate cut might take till yr 26 to feed thru so are you suggesting now good time to buy 2 yrs ahead of time.

be interested to know what on your radar

[winner69]

When I say its time to invest for future during deep downtrends ....then U call me ramper ...and overenthusiastic ...perma bull ...what not ...lol


Hey alokdhir mate …never called you a ramper …..just admire your optimism

[alokdhir]

when will corporate earnings bottom ? int rate cut might take till yr 26 to feed thru so are you suggesting now good time to buy 2 yrs ahead of time.

be interested to know what on your radar

Mate Bull ....SP of any stock is based on EPS plus rates based valuation multiples ...when rates fall ...multiple expansion kicks in faster then eps expansion ...

[alokdhir]

[QUOTE=winner69;1060292]Hey alokdhir mate …never called you a ramper …..just admire your optimism[/QUOTE

"Hey alokdhir ….you worry me when you go on a ramping spree like this morning

Makes me ask myself ‘what’s up, why is alokdhir doing this’

Minding you I’m ramping thl eh so can’t talk "

Dated 6/05/2024 ...MFT thread ....just for record ...as I know u mean well always ...:D

[clip]

what NZX stocks are sensitive to inflation, and should increase in price when interest rates are reduced?

From ChatGPT:
NZX stocks that tend to be sensitive to inflation and may increase in price when interest rates are reduced include companies in sectors such as real estate, utilities, and technology.


Real Estate: Companies like Precinct Properties (PCT), Stride Property Group (SPG), Goodman Property Trust (GMT), Vital Healthcare Property Trust (VHP), and Argosy Property (ARG) are in the real estate sector. These companies often perform well in lower interest rate environments as borrowing costs decrease, making real estate investments more attractive.

Utilities: Genesis Energy (GNE) is a notable stock in this sector. Utility companies can benefit from lower interest rates due to reduced financing costs for their capital-intensive operations.

Technology: Companies such as Rakon (RAK), ikeGPS Group (IKE), Vista Group International (VGL), and Serko (SKO) are in the technology sector. These firms can benefit from lower interest rates as cheaper borrowing costs can spur investment and growth in technology.

Transport and Infrastructure: Infratil (IFT) and Mainfreight (MFT) are infrastructure-focused companies that can also benefit from lower interest rates. Infratil, in particular, has been highlighted as a "stock to watch" due to its diverse investments in essential services.

These sectors are generally more sensitive to interest rate changes because their capital expenditure and operational costs are heavily influenced by borrowing costs. Lower interest rates make financing more affordable, potentially leading to increased profitability and higher stock prices​ (StockTalk (https://stocktalk.co.nz/index.php?topic=275.0))​​ (Sharesight (https://www.sharesight.com/blog/top-20-nzx-trades-february-2024/))​​ (Simply Wall St (https://simplywall.st/stocks/nz/growth))​​ (RNZ (https://www.rnz.co.nz/news/business/474731/nzx-falls-sharply-as-us-inflation-triggers-market-turbulence))​.


---------------

would people agree with this?

[bull....]

Mate Bull ....SP of any stock is based on EPS plus rates based valuation multiples ...when rates fall ...multiple expansion kicks in faster then eps expansion ...

stock buybacks do the same.

anyway the rate of knots wall st is climbing on a narrow breadth what happen when it crashes ?

[bull....]

Record numbers leaving New Zealand, with more departing in May than arriving - StatsNZ
https://www.rnz.co.nz/news/business/521778/record-numbers-leaving-new-zealand-with-more-departing-in-may-than-arriving-statsnz

[bull....]

Stocks fell 21% on average after first Fed rate cut since the 1970s, says Comerica
https://www.marketwatch.com/livecoverage/stock-market-today-s-p-500-futures-inch-higher-as-ai-frenzy-continues/card/stocks-fell-21-on-average-after-first-fed-rate-cut-since-the-1970s-says-comerica-xr9yBoZ9PeIkFpOeqfE8

[Daytr]

Stocks fell 21% on average after first Fed rate cut since the 1970s, says Comerica
https://www.marketwatch.com/livecoverage/stock-market-today-s-p-500-futures-inch-higher-as-ai-frenzy-continues/card/stocks-fell-21-on-average-after-first-fed-rate-cut-since-the-1970s-says-comerica-xr9yBoZ9PeIkFpOeqfE8

I must admit it's been one of my thoughts, where do US stocks go once they start cutting rates? They are already at record highs and some pretty lofty valuations in some cases.

[alokdhir]

I must admit it's been one of my thoughts, where do US stocks go once they start cutting rates? They are already at record highs and some pretty lofty valuations in some cases.

I wondered the same when Nvidia was USD 400 but ....I am sure I am going to be right one day ...just need be consistent ...what is easier to be consistent ....short or long

[Entrep]

Don't lower interest rates mean higher stocks?

[Daytr]

I wondered the same when Nvidia was USD 400 but ....I am sure I am going to be right one day ...just need be consistent ...what is easier to be consistent ....short or long

Definitely long, but I would rather wait to install a long. Happy to be playing in commodities at the moment.

[kiora]

"It’s also worth remembering that humans are notoriously bad at picking market peaks and troughs – everyone from expert to amateur level. The point is that if you’ve done your research and like an investment, believing that markets are at highs is not necessarily a reason not to invest. Poor fundamentals on the other hand… "

"Fear & Greed

It’s not all a guarantee – the fear and greed index is correlation rather than causation, but you wouldn’t necessarily expect the market to nosedive tomorrow, given this sentiment. This would suggest that perhaps the current market highs are not to be feared… yet."

https://www.livewiremarkets.com/wires/why-you-shouldn-t-fear-the-market-highs?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Thursday%2011%20July%202024&utm_content=Trending%20on%20Livewire%20-%20Thursday%2011%20July%202024+CID_85916dbad4983af 962a9ab3a0c8905a1&utm_source=campaign%20monitor&utm_term=READ%20MORE

[winner69]

Sharon at ANZ says Heavy Traffic Indicator implies an ugly read for June quarter GDP

https://eu.watermarker.singletrack.io/ANZ_NZ_Truckometer_southbound.pdf?data=DhZAW5pNirs govBdALYwogjcrWZAB6DXgwQPV%2F%2FR4Y8c2U5HXzipnPnjS hFNDgLRga0%2Fl4fXY0u7%2BiuK0FSiPf3f8DqlXlWyAWUBt2m mlUcmGX0Tmofdze32IzI0sbKpoQ7grH8WRz%2Bp07yEFnSGL0s sMhRcMcg9gr20N8cuIFkH2jfIridgw2QAN5IOzIuStIxpc2XE8 CJ%2FjoMee%2B4Nx5Jf9AEfX0xdfcvLJyXNcfnDHUlaq8y7kxC iIjX5hHWERCycjgOXkF3xhiEJNrF03fpatIh8JtY4ZML7lITUp YlGHctMRV%2FDcqv3VSunDP9gQV3n6w7sDCv7vij0L5mQIbss9 y55DW9%2F6hdiz5opZguZF51VAzLWoA0YQ78hy0uD%2B%2BY%2 BHp8kgLcxACj7trGsJVaxuDC2gs7t8Dm3lqrZXnlelL5Jayg%2 Fd3RI4pldRifHuB5FQjSVNJ%2FnOM73pSbwMQzSSHfhLSmZKdD y7qpPvpGjDVvZbswFIzJKfH%2BEeA%2BPL9STIagrShyYEz0IX PorognLv%2FMVyPqrbWjX1Bh7RogBm3UHCc3qnwo912fa%2Fqu %2FRpTWYUto%2B7SdifKzlf%2FVr9U7Qp02XRgSRB99wcG8hna GF%2BWTV%2BO37ed5vqgEMnAP1wpTkbXHgkCKajJJQdrLlzi3f FYfznmAonsvOhMD8pvthMzWyrL1wYg89A%2FCw23uGi1mszHwu iPRvVQAe2q4jTn%2FtuAxLBhekoG0BJ0KlzuxGSf1ju6KlqpB3 bZ0SOuQcSAuX21vBxBDwjPaL6iSRBw0XPDUCjHvGRUPjzuljEv Yn04Xd2FRtHsQWqeZXbxEP9puohsX5OgYRPIIVzLQeA%3D%3D&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Truckometer_southbound.pd f%3FX-Amz-Signature%3D7b0c9cc982941e6d96e812b98bdd8e4abb2dc9 5828f2e2b8919ad2b03177633e%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAW3DTAMO2PNZSGZ3G%252F20240710%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20240710T233634Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[Rawz]

Sharon at ANZ says Heavy Traffic Indicator implies an ugly read for June quarter GDP



as expected and foretold here :)

[allfromacell]

Annual food prices drop for first time in six years... Hopefully the RBNZ is paying attention. First cut in August seems more and more likely.

https://www.stats.govt.nz/news/annual-food-prices-drop-for-first-time-in-six-years/

[Valuegrowth]

Hi Value G , the RBNZ is not mandated to keep “ Non tradeable” inflation in the band .
So if we get a low CPI print next week , by the time they update the Aug MPS numbers a cut in Nov can be on the cards . The wholesale interest rate market certainly took things considerable lower post the OCR update today .
Thanks, stoploss. That’s what I expected originally. Still, I have a doubt.

https://www.newstalkzb.co.nz/news/business/interest-rates-major-bank-westpac-drops-mortgage-rates-term-deposits/

“The biggest drop will be to its one-year rate, dropping 25bps to 6.89% (special) and 7.49% (standard).

Westpac’s six-month rate will fall 19bps to 7.05% (special) and 7.65% (standard) and its 18-month rate will drop 10bps to 6.79% (special) and 7.39% (standard”

Fortunately, I was able to fix my mortgage at a rate of 4.9% for five years. 3 more years left for renewal.

[stoploss]

Thanks, stoploss. That’s what I expected originally. Still, I have a doubt.

https://www.newstalkzb.co.nz/news/business/interest-rates-major-bank-westpac-drops-mortgage-rates-term-deposits/

“The biggest drop will be to its one-year rate, dropping 25bps to 6.89% (special) and 7.49% (standard).

Westpac’s six-month rate will fall 19bps to 7.05% (special) and 7.65% (standard) and its 18-month rate will drop 10bps to 6.79% (special) and 7.39% (standard”

Fortunately, I was able to fix my mortgage at a rate of 4.9% for five years. 3 more years left for renewal.
Those Westpac cuts today only match what the other big 3 were already doing . The banks have room to move lower as wholesale rates continued lower today .