Not just consumers beagle --- farmers feeling really down as well
Farm confidence hits lowest point in decades: Federated Farmers
https://www.stuff.co.nz/business/far...erated-farmers
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Not just consumers beagle --- farmers feeling really down as well
Farm confidence hits lowest point in decades: Federated Farmers
https://www.stuff.co.nz/business/far...erated-farmers
I was a farmer for 30 years and I was always surprised by the amount of needless negativity the majority could come up with especially in the good times. Oddly stoic in the bad times. I always presumed it was the influence of the previous generation who grew up post WW2 but I didn't find the people I grew up with in the city to be like that.
So to sum it all up, the farmers need a good kick in the nads to be happy, lets ban irrigation for pasture growth and stop the use of N outside of cropping and seeds. Do ourselves a collective favor for the future.
Everybody moaning and groaning ….but the country continues to live beyond its means
From Westpac - New Zealand's annual current account deficit widened to 5.8% of GDP in December, compared to 4.6% in September. Today's result was wider than our own and the market's forecast
Record 24 Covid-related deaths
https://www.nzherald.co.nz/nz/covid-...QOTQDGGCDHUAY/
Among the 24 deaths reported today were eight people who died at aged residential care facilities
well really taking off now , wait till the borders open.
that confidence index is going down
NZ posts a record $20 billion annual current account deficit
Infometrics principal economist Brad Olsen said the deficit was more evidence the country was at the tail-end of an economic cycle
https://www.stuff.co.nz/business/128...ccount-deficit
This must be one of your darker days, isn't it? People are optimistic, and optimism is for you what a red cloth is for any bull.
Have a look at all other countries who passed the Omicron peak already ... deaths tend to peak roughly 4 weeks after the peak of new infections. We know that and follow the well known trend, just that our death rates are ways lower than in most other countries. Nothing to see or worry here.
And your reference to opening the borders is laughable. Typically around ten cases per day who get caught in the test at the border anyway ... which means at worst a single figure of additional cases per day slipping through the border. This will make all the difference, given that we breed 20k cases per day by ourselves, won't it?
I guess considering worst case scenarios might have some merits (even if its not healthy if its the only thing people do ...), but making things up just in order to frighten people which don't make any sense at all?
I think you urgently need some balance. I do worry for you.
But this supposed to be dreadful news could hardly dent NZD ...it need to fall to balance the economy towards more exports then just plain consumption as we all survived Covid ...Next few months are crucial from many angles ...But I reckon NZD will help rebalance the economy ...it always picks up the slack ...60 cents on cards
Bottom is in according to a friend who's right half the time:)
Reduced some of my gold and energy stocks today.
Green mkts everywhere,some chinese
companies, tencent ,Alibaba up re 25%
Tech rebounding
Assumptions the Ukraine war is nearly over,Zelensky says joining Nato not an option
World is opening back up from Covid
But the Fed reports and raises int rates Thursday,how hawkish?
Fed has 0.25% point increase
They about as wimpish as our RBNZ
Orr will follow suit no doubt …no 0.5% for him
Its simple in their minds ...Inflation is lesser evil then Recession ...So it will be slow up only and smaller top only then what markets have already priced in...
Bottom is in ...slow grind up ahead ....provided we actually dont end up in recession ...IMO FED and other central banks will try their best to avoid that by tolerating inflation little more then required
I've lost count of how many times you've called a bottom in the last couple of months.
In saying that, I agree a short term bounce to set a weekly lower high is most likely from here as we now have enough information to conclude that. Change the weekly trend and then we can start talking about longer term bottoms being in, but there is significant work required by the bulls to achieve this.
The NZ economy equation is heavily weighted on Imports/Exports variables...that means NZ's currency is affected by NZ trading partners currencies..the two biggest being China and Australia. Generally speaking (compared with all other Countries in the world) the strength of a Country's economic health = the strength of their currency..Both Australia and China have strong currencies and so has NZ.....I good place to be ..eh alokdhir.
Another major variable that affects a currency is interest rates difference (change) between other major trading Countries. With Monetary policy I personally can't see a lowering of the NZ$ / lowering short term interest rates differerntial within this current high inflation environment..
About 170 Countries trade their currencies each day...NZ may be a small Country but it's Currency NZ$ is the 10th most traded currency in the world (~ $70 Billion/day). The currency market is the biggest market in the world trading at around $US 6.6 Trillion/day (2019 data).
As we can imagine, manipulating the Forex every day to lower the NZ$ would become a very expensive exercise.
They say the Team of 5 million are starting to pull their heads in now and with expectation the future spending data will be down ...The currency market left alone to function usually auto-corrects..
Yes Hoop …..we should look to a higher NZD and be proud of it
A low NZD is a sign of failure
GDP year to December 2021 +5.6% on pcp
That's pretty impressive
and mostly all done on borrowed and printed money lol
GDP in the year to December 2020 was -2.1% so much of the 2021 "growth" was bounce back recovery.
https://www.stats.govt.nz/news/gdp-r...r-2021-quarter
Uncomfortable week for the 🐻🐨 bears
What are peoples outlook for the markets in 2022 and 2023? I thought after the incredible (artificial) growth of the last year and a half, that we would see a prolonged period of exhaustion and drop off in the market.. if only we had a crystal ball.
Yes we will look back with our "20/20" glasses on. Like 100 years ago the roaring 20s we could experience a similar decade, 2 years in there has been built up a lot of wealth that those who have it can spend. There are jobs galore due to low migration and interest rates despite rising modestly, will still be very low. The inflation genie is out of the bottle and I think that encourages spending as it is cheaper today than tomorrow
Consumer confidence lowest since 2008 global financial crisis: Westpac survey
https://www.stuff.co.nz/business/ind...westpac-survey
i see bonds in the US had a big jump last night and in NZ they are hitting new high's this cycle.
Stock investors still in lala land
I guess time will tell whether it is stock investors or bond investors who are in lala land. Persistent Inflation will kill the value of bonds (it always did in the past), while stocks will survive even hyperinfaltion (they always did in the past) ...
Ah yes, but don't forget this time will be different - the bull is a bear ... though - he always was :);
Depends on which stocks you did hold at that time. Solid companies producing useful products had a good return, even then (well, on global markets, didn't watch NZ at that time)
Quite different to the after inflation and after tax returns of bonds.
As well - it might help to broaden your perspective if you study more than one somewhat inflationary period. Who is saying that this will develop like the 70íes?
Just looking at the current geopolitical situation it might be more useful to study what happened to bonds vs stocks during in the 1920'íes ...
Obviously - anybody who managed to pick the peak in 1929, went (short before) that day into cash and went some months later back into stocks, made big money. But what for the majority of people without a working crystal ball?
Anybody who kept their money throughout the 1920'íes in bonds was a big looser ...
more bad news out today
Inflation has so much strength and persistence that the RBNZ will likely need to keep raising interest rates despite softening house prices, ANZ economists say
https://www.interest.co.nz/property/...d-keep-raising
wow bp better ditch those oca's lol with house prices falling retiree's wont be able to afford the units or apartments. might have to settle for fbu flatpacks
Yeah, high inflation is generally bad for stocks (e.g.s&p 500) and bonds. Worse for bonds, however. The only things that are really working well for me are my oil ETFs (OIH, XLE, and IXC) and Australian resources (mostly held by Smartshares ASR). In the 1970s of course only commodities, gold, and oil did really well. Real estate too I think.
I do hold paper gold via Perth Mint's PMGOLD fund and have been selling a little and reinvesting in Kernel; Simplicity and Superlife. Just a little mind, we might have a long way to go. Paper Gold is my cash allocation. I have next to zero cash. So far, gold is doing everything I've hoped it would do.
The rest of my portfolio, which is the whole world market, is tanking. The above just represents a tilt.
Nearly all my equities are in NZ and aus except for a Canadian Goldie.My energy stocks,all established producers are booming,recent buy BHP (selling its energy portfolio to Woodside which I hold) going up and my gold producers doing great as well,finally . A great hedge and keeping the value of my portfolio stable.
US bonds rising strongly again today , i have the top of the range around 1.35 ...3-3.1 which has been the range pretty much since 2011. risk rising for stocks
lets not forget the looming food crisis coming
Fertilizer prices are at record highs. Here’s what that means for the global economy
https://www.cnbc.com/2022/03/22/fert...hat-means.html
My shorts on bonds are flying :t_up:.
Bigger picture, this weekly bounce on SPY is large enough that we should now hold the lows in the short term. I mentioned previously that sentiment was way too bearish and hence we were due for a bounce to unwind overconfident bears. I still see the medium term outlook is that we set a monthly lower high and roll over (NZX last year is an example of what could happen, although I would think it'll be a bit faster as the NZX had the backdrop of a rising US market).
How reliable do you feel paper gold is? One hears that the amount of gold backing the paper can be way less than 100%. My converse problem is I don't want little bits of metal to look after myself.
Jesus, S&P500 just 3 per cent from all time highs now.
I have a strong preference to read your comment without the blasphemy but yes the strength of the rebound in the S&P 500 is quite surprising especially in the context of the war in Ukraine continuing, much higher 10 year bond rates, very high inflation, very high oil prices and of course the well known intention of the US Federal Reserve to raise interest rates many times this year.
Maybe there are implications for some of our stocks that have been beaten down below their intrinsic value ?
DOW is only 4.5% off ATH. Underlying seems to be boosted by the US Tech rebound, i.e. DOW/SP5 lagging Tech, however some cautions from the DOW Chart, this current short term uptrend has a falling volumes divergence and volumes below average, and MACD histogram turned over a few days ago. Positives are the daily busted up through 200 and 100 MA's today.
Not entirely unsurprising as at the lows bearish sentiment was extreme. We are now seeing the unwinding of these short positions and FOMO return to the market. Long term shorts are scouting a good risk/reward entry playing off ATH's. I think the bigger picture of rising yields is too great for markets to overcome, but I don't expect us to crash down in the near term either. I'm basing my trading plans around trading in a range of the ATH and recent fear low for at least the next few months, with a bear breakdown later in the year.
One thing is for sure though... the NZX is a dog and has been gaining more and more dog status by the day.
@Beagle, @Bohemian, I'm a blasphemer, for sure. I don't want to deliberately offend you. Unfortunately, it's likely to come out again from time to time as it's my natural way of speaking and writing and I like it. No offence will be taken at all if you wish to block me. It's fine.
At the moment, I'm on a bit of a rough up and down DOC track (with a bit of 4g) - I have cursed and blasphemed a lot on this track. But I hear cars, so my knees are about to get relief.
@Baa baa. I still have a little dry powder but not much now, so I hope it holds. Oil dropping so much is a bit of a worry for my tilt.
The NZX is tiny exchange. It just takes a couple of big companies (such as ATM or FBU etc.) to underperform and it effects the index. Besides, so many successful NZ companies end up taken over by foreign concerns or migrating from NZX to the ASX anyway. However NZ households have been/are encouraged to put much more of their investment into NZ residential housing and that has been a boomer over the years!
fundamentals , china and nz both worst markets to be in last yr and a bit and both struggling with economic problems.
NZ being like you say a large part of the economy reliant on housing for economic growth and maybe int investors are worried about how NZ will fare when its economy is so reliant on a open world for trade.
I see russia lavrov saying yesterday a bi polar world of trading blocks maybe what they are aiming for. how will nz fare under this senario china/russia block or us block ?
NZ shares this year have outperformed
Emerging mkt shares
Europe
Japanese
World
USA
Aus and UK shares have outperformed us . All in the negative of course. source Bloomberg
We've had a long many year bull mkt,I for one am now set for an enjoyable retirement financially wise.
I can see how Russia wants to trade with China. Not so sure, though whether China wants to continue its trade with Russia, if this means it can't trade anymore with the West.
Russia is these days a quite useless pariah state with plenty of (poorly maintained) nukes but very little economic power.
It clearly won't be Russia to decide about the future of world trade relationships. Prior to the sanctions they weighed in with half of the Italian GDP - and by now it will be much less. I doubt that China wants to paint itself into the Russian corner. China is already and wants to further grow as a global power house. This won't fit well together with taking a hospital pass and quaranteening with the sick Russian bear who is controlled by a madman.
It looks like Russia is trying to stand up to the recent sanctions and dictate payment terms of trade to Germany - the engine house of Europe. The gas supply is under threat. The LNG supplies from the USA will be too little too late? Russia has not yet lost the Economic Ukrainian War? When the two most important countries on the continent fall out, that is when the proverbial really starts to hit the fan!
https://www.bbc.com/news/live/world-europe-60923158
Russia says it's building a new "democratic world order" with China
https://www.cbsnews.com/news/russia-...w-world-order/
the real reasons for the war ?
Well yes, I heard about Putins desire to break international contracts re payment of gas delivery as well. Obviously - he is a crook and a liar, so anything is possible.
However - listening yesterday evening (NZ time) to the German TV news (Tagesschau - 7 am edition) - they said that Putin called and told the German gas suppliers that they can continue to pay in Euros, as the contract between the Russian Gasprom and the German gas suppliers specifies.
I suppose this is more up to date news, it normally takes a bit to channel through to NZ, but who knows ... obviously - Putin is a crook and a liar, so I guess we will see what will happen.
I understand Germans prepared already for gas rationing - I don't think they are prepared to succumb to Putins black mail attempts.
https://qr.ae/pvKRE4
Russia’s financial war
The really important Russian war with the West is the financial war, which the western media never discusses.
Here are the developments:
Russia has told the EU nations that from April 1, it will only accept rubles for Russian natural gas;
The EU has said that they refuse to pay rubles, and that they will only pay in US$ and euros;
The Russians have said that they will not accept US$ and euros, because they could sanction Russia any time, in which case the US$ and euros Russia holds are worthless.
The US and UK have signed regulations not allowing Russian gold to be sold in US, UK gold exchanges.
Now, the last part is very interesting, because Shanghai has its gold exchange. Hmmm, are you thinking what I’m thinking?
Putin has done something else interesting, and he has announced that the Bank of Russia will buy gold. The gold can then be converted into rubles, which can then be used to buy natural gas.
The German government is in a very bad spot because its economy depends on Russian natural gas. If they break with the US, the US will be annoyed. If they obey the US, the German economy, which is a major global economy, will slide into a major recession.
What happens if Russia announces that it will also accept Indian rupees and Chinese yuan in payment for natural gas? Just no US$ and euros. Would the Europeans scramble to buy rupees and yuan? What happens if the Chinese say they don’t want US$ because the Chinese believe that the Americans are going to sanction China next?
That would be very interesting.
Let’s see who is going to be the fool on April Fool’s day.
It's summer in europe soon. There's time to think it over.
it is certainly a volatile situation. I imagine the contract did not allow for the situation when the purchaser makes payment as per the contract but is also party to sanctions, imposed after the contract was signed, that affects and may affect what the supplier can subsequently do with that payment.
10-year Treasury yield hits high for the year after Brainard signals speedy Fed tightening
https://www.cnbc.com/2022/04/05/us-b...-inverted.html
day of reckoning coming ? maybe not for the blind
Onwards & upwards?
https://www.newshub.co.nz/home/money...y+6+April+2022
Fed officials plan to shrink the balance sheet by $95 billion a month, meeting minutes indicate
https://www.cnbc.com/2022/04/06/fed-...meetings-.html
here's some more commentary on why the fed is not your friend now
If Stocks Don’t Fall, the Fed Needs to Force Them
Investors should pay closer attention to what Powell has said: Financial conditions need to tighten. If this doesn’t happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response. This would mean hiking the federal funds rate considerably higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower.
https://www.washingtonpost.com/busin...fb4_story.html
yep makes perfect sense , force asset markets down or should i say all markets . people stop spending as the wealth effect dries up and bingo supply chains start to free up and some of the inflation goes away. hey dont need to increase rates as much.
im sure its more complicated than this with many more variables to complicate things so probably wont be this simple
I listened to a podcast today and they discussed how the Fed is going to talk tough on rate hikes but not actually be tough with rate hikes.
Reason being is because the US needs inflation to help reduce their massive debt pile (relative to GDP and the tax take).
So could be a long period of high inflation and negative real rates.
Where is the best place to buy gold coins? Lol
I think I need more debt :scared:
Developing countries use inflation to undermine their debt ..eg India ...regular inflation of over 6-7 % ...huge debt ..rates are always high but stock markets keep doing super well as GDP keeps growing in nominal and real terms ...growth takes precedence and value of historical debt keeps falling thus keeps becoming more manageable .
From stocks perspective ....Inflation helps increase eps thus SP ...also stocks benefit from replacement cost analysis ...only from DCF valuation angle higher rates hurt stocks ....but if companies can increase revenues , which is easier if prices going up , then nominal EPS goes up thus increasing SP .
Inflation is a tool to handle high debt but in developed world it hurts the poor people most thus a very unpopular and tough choice .
We do have problem of high debt in developed world now so Central Banks need to choose between growth or inflation and also debt Service burden of future ...which may become unsustainable at higher rates and longer term without growth and inflation
IMO ...path of growth and higher inflation then before is the easiest and soundest way out of huge Govt debts of developed world accumulated over last 10 years ...so super high rates which many are predicting to bring inflation down to previously normal levels may not happen .
Best approach , to stay in productive assets as they will also inflate with general economy while cash or similar assets will depreciate to accomodate huge historical debt servicing
Longer to medium term see no benefit of going out of stocks
US 10 YR hit new highs last night still see the move to 3 being the top of the chart range before consolidation i reckon.
wow NZ 10 yr at just under 3.5% as we type :scared: those bond proxy stocks will be paying less than holding a bond soon :scared::scared::eek2:
I guess bond proxies are the property companies and the power companies and utilities like Vector.
Am I reading this correctly the NZ Govt 10 yield has almost doubled over a year.
https://tradingeconomics.com/new-zea...0months%20time.
If asset prices really were the inverse of interest rates then the value of the bond proxies should have halved by now.
Is it because the interest rates were so ridiculously low, will the bond proxies get smashed once interest rates rise above dividend yields perhaps.
For a lot of the bond proxies like Vector debt at $2,838.3mill a 1% rise in funding equals $28.3 extra in interest payable. With a declared profit of $194.6mill that is a not too insignificant rise in one of its main costs. Imagine if rates were to rise by 3% Vectors profit might halve. Bond holders would still get paid but the dividend might be in danger.
I assume no one believes central banks will genuinely fight inflation with higher rates.
from the chart section of interest.co.nz which is an outstanding resource
https://www.interest.co.nz/charts/in...ent-bond-rates
Thanks for that, flicking through the different time periods the 1yr rate is interesting with people happy to lend for a year at 0% up to October 2021 now it is 2.5%. I guess the 0% might have been Orr buying govt bonds to suppress interest rates. Not sure that could be fake news but I understand central banks print money to buy govt bonds at low yields for the short term to influence rates in the long term.
Pretty extreme moves but not reflected on the NZX as yet. I don't think Adrian Orr has the courage to act and obviously I am not the only person who thinks that.
Either that and/or the financial advisors have sold the buy and hold for the long term narrative. They forget to mention their fees are also dependent on how much you have invested with them. They win up or down and only lose if you move money to the sidelines.
Super bubble pop by Jeremy Grantham
https://www.youtube.com/watch?v=JlEGU2ypr1Q
Even Jeremy admits he is usually a few years early.
Talk to clearasmud as he has a strong conviction on which year it all turns to custard and based on Jeremy's previous early calls he may be right. I guess that is why they say forecasting the future is as clear as mud.
got to keep in the back of your mind its political now as biden is saying he wants inflation down.
anyway bonds hit new highs this cycle again last night ... still picking around 3% for current move
also keep your eye on the mens underwear index for recession signals :eek2:
double posted sorry.
Anyone's guess what the RB WILL do this week
The case that they should raise the OCR this time by 75 or even 100 bps is pretty strong. The RB has been behind the game from the start, (core) inflation is high & the real OCR is much lower now than pre-Covid.
But I reckon our friend Adrian will be wimpish and go for 25 bps
I'm all for two 50bps rises, this month and next, followed by 25bps rises thereafter. The RBNZ needs to show credibility that it will rein in inflation, rather than let it get entrenched and self fulfilling, requiring even greater rises later which will increase the odds & severity of a recession
If they go 25bps this week, they may still have to do two 50bps rate rises back to back, as inflation data is released. It's possible the next two inflation releases will be between 7 to 7.5%. We gotta clock this on the head now
I'm thankful we aren't as behind the curve as the americans !
the RBA a bunch of wet blankets too
I'm really enjoying podcasts by Larry Summers who I reckon has been spot on about inflation.
Got to keep entertained and occupied when the moose family is locked down & suffering from covid. Thankfully our symptoms are manageable, but being locked down for at least a week with hacking children isn't very pleasant.
Guttered! Lucky it is manageable. Lockdowns with children is hard enough lol let alone them being sick.
Talking about podcasts, what is everyone's favorites. I listen to:
Macro Voices (best)
We Study Billionaires (very close second best)
The Acquires Podcast (bit more relaxed)
Motley Fool Money (constantly reinforces simple investment themes)
Stephanomics (good but short)
Millennial Investing (hit and miss)
any good ones i am missing? I listen via spotify
probably doesnt matter what the RBNZ does this week , the banks are doing the tightening.
It will be more interesting how much more the banks jack mortgage rates higher after the RBNZ announcement. they will cause the recession not the RBNZ
The biggest issue with this country is too much of a % of working peoples pay packet goes towards housing (rent or mortgage). I am very fortunate to have worked myself up the ladder enough to earn 3x the medium nz wage in my early 30s and wonder how on earth some people in real jobs like truck drivers or midwives do it.
Im not calling for a housing collapse. We need higher paying industry in this country. We need to strive to be the silicon valley of the south pacific. Luxon talks about this type of economy. There is hope w69
in a round about way higher fuel prices do some of the work of higher interest rates. one could argue in a heartless sort of way that in aggregate the country would have been better off not slashing the taxes on fuel. obviously that would never fly. but higher interest rates later are equally challenging & give more political cover
Latest Kiwibank household spending data shows that the March quarter spending was 'especially weak'
https://www.interest.co.nz/business/...was-especially
ASB economists say last week's 'big lift' in wholesale interest rates added to the upside pressure on mortgage rates
https://www.interest.co.nz/business/...s-added-upside
just what i was thinking earlier today about banks jacking mtge rates thru the roof will KO the economy when combined with high inflation.
of course the NZX is still in LALA land
No need to raise rates when consumer spending is falling off a cliff
this from Tony Alexander:
Right at the start of this year the willingness of Kiwis to spend on goods, services, and assets over the coming 3-6 months took a substantial step down. Our latest survey shows that spending willingness remains weak, and this has important implications for monetary policy. It tells us that the weakness in household spending which the Reserve Bank wants in response to higher mortgage rates is already happening. This does not mean the official cash rate won’t be increased through 2022. But it does mean the heights it gets to are likely to be lower than some have recently been thinking solely on the basis of this year’s surge in inflation.
Not really the banks jacking rates up though is it... it's driven by bond markets which are fairly free functioning. Haven't checked in awhile but I think their NIM's are fairly low at current spreads.
Interesting.
These would give the RBNZ an easy out from doing a 50bps rise.
Might prefer to take the path of least resistance.
Prefer them to raise 50bps tho…with all time low unemployment that is forecast by trading banks to keep declining this and next quarter, things are very tight. Id be more worried about wage inflation spiralling out of control in the future than taking comfort in weak consumer spending.
I read a while ago, in easier times, that the bond market/interest rates are like a horse tied to a post, with the "post" being the reserve bank rate. The post will normally keep the horse nearby, but when something spooks the horse it may decide to bolt off and it rips the post out of the ground and runs off.
I think Orr needs to move 0.5 this time, in order to get some credibility with inflation, also need to get the reserve bank rate closer to the market rate so as to re-attach it to the post again. Hey market, we are in control remember, this is what the interest rate should be etc etc.
Feeling pretty doomy about the share market in this environment. NZX doesnt have anything I fancy at anything like a reasonable price, inflation and jacking interest rates is going to hurt consumers, businesses and everyone across the board. Im easing even further out of the market into cash, where Im only loosing 7% per year to inflation......