Beware : Hoops friday Rant is a personal view
Quote:
Originally Posted by
turmeric
Hi Hoop,
For the most part I agree with what you are saying. Where I disagree is your inference that the exchange rate is moving in ways that analysts don't understand and that is why it is being are labelled as overvalued. I sat down and had a chat with one of the e-rate specialists from the Reserve Bank the other day and I can assure you those guys have a very good handle on what is driving our dollar.............
Yeah sorry about that... Very hard to write a short simplified post on ST without suffering some effects of lost in translation....I personally have the people at the Reserve Bank of NZ in high regard .. They have handled the GFC from the NZ point of view extremely well.. We people in NZ have a lot to thank them for.. It seems from our favourable outcome that their modelling have been excellent..and I acknowledge their genuine concern when their modeling throws up warning signs when the higher NZ$ in factored in.
My referral of analysts statements were of the "garden variety" kind outside the Reserve Bank who may have personal agendas such as those with some overseas currency elements within their investment portfolios ......which they possibily may have increased their weightings on when the dogs started barking overvalued NZD a year or so back at 77c......there's no sinister inferences by me....we all realise that certain professions profit with a lower dollar ...farmers and exporters are the two that become very noisy and hit the moral high ground saying lower the dollar for the "common good" of the Country ......
I'm not a die hard free marketer as I too believe intervention by some means (qe) to Lower the $ is good for the economy for the short term and especially needed during periods of crises.. Unfortunately I'm old enough to remember the bad ....Muldoon was an expert at QE and the public of NZ allowed him to mis-applied it in election years ........However I've been on this Earth long enough to see that in the long term its not necessarily a good thing.
Overstating the simple..those relying on lowering the $ all the time become lazy and lose touch with their markets. That competitiveness and innovation to improve and grow within the marketplace falters as does communication channels within the markets needed to self correct... creating that false logic and proof that invention is always needed ...NZ has been down that track and nearly ended up defaulting and it has taken a long time to claw our way back up in the global rankings....All the top brains realise this.....however as long as the crises remains, I guess intervention and protectionism for self survival takes paramount and NZ will just have to suck it up until the markets self correct...this requires the application of disciplined long thought of contingency plans and patience rather than the noisy media demanded layman knee-jerk ..eh?
Quote:
Originally Posted by
turmeric
Hi Hoop,
.....That essentially the NZD is facing unprecedented pressures from QE easing, primarily coming out of the US, but also Europe and now Japan. Our dollar is at the mercy of this type of monetary policy and has become overvalued as a result. ...
Agree sort of ...unprecedented...no ...This time around QE has been much more intensely applied (more players involved.. Japan joining the party they should've done it 20years ago but that's another story) that is understandable as this has been the biggest Global crisis in recent history and it is going to take a longer period of time than normal to turn this juggernaut around.
Agree NZ is at their mercy...always have been always will be...the typical problem of a small country with a small economy of scale forcing it's economy to be reliant on one market..that is some of the reasons why NZ will not have safe haven status and will have to forever endure currency fluctuation (a cycle with high frequency oscillations)..NZ has endured 150years of this repeated cycle ...the media noise at the moment suggests nothing has been learn't by the major populace.
Quote:
Originally Posted by
turmeric
Hi Hoop,
.....That essentially the NZD is facing unprecedented pressures from QE easing, primarily coming out of the US, but also Europe and now Japan. Our dollar is at the mercy of this type of monetary policy and has become overvalued as a result. Under these circumstances this is not a reflection of the strength of the NZ economy.
I don't see it that way...Tumeric..view the situation from another angle and it becomes clearer....say for example...
If NZ was affected as badly as USA or Europe... Overseas investors would be thin on the ground those already invested in NZ would have taken flight.
There would be a surplus of NZ dollars (due to capital flight) The surplus would lower the currency to point where risk < reward (yield rate) and the surplus evaporates... NZX would be a lot lower (probably be in a bear market as happened to the AORDS last year when Aussi RB failed to ease) due to less available money and surplus of sellers competing for that money...and ditto with the property market...higher interest rates to attract overseas money to replace expiring debt/bonds etc...which creates more risk of a possibility of a self fueling downward spiral of unattractiveness for Equities and property.,,,eg Spain
Looking at above scenario I think NZ attracting investors whether its our companies or our markets (dairy, film industry etc) and still willing to buy in with our appreciating NZ$ indicates to me that the NZ economy is showing or "perceived to show" strength.
My Black Cat is Blacker than yours..
Received 19 shillings and sixpence.. for every pound ... When I first landed at Whenuapai Airport..
Immediate PR STAMP.. On a standard canteen style table..
No Bull**** !!!.. ... Welcome to NEW ZEALAND !!..
Heheheee.. I have never regretted stopping of here.. NEVER ...NEVER...NEVER..
For Gods sake try to keep it that way !!!..
Saya hanya berichara bahasa Indonesia sedikit*
Quote:
Originally Posted by
TimmyTP
...I wonder what is the tiger vs dog spread amongst ST members?
I wonder what a dog spread is. Some sort of sheet you throw over the sofa to stop it getting covered in dog hairs?
I don't understand what you are asking.
Best Wishes
Paper Tiger
*I only speak a little Indonesian
Nihongo wa muzukashii, desu ne?
Quote:
Originally Posted by
Paper Tiger
I don't understand what you are asking
Fair point!
According to my friends from Hong Kong, dogs worry a lot and tigers are brave and daring.
Anyway Goldstein's post made me wonder whether I am being unusually cautious (a dog) and whether most others were betting the farm (non-paper tigers).
Feel like I could be on the wrong thread though.
So.... another fun day on the NZX, less exiting for me than Wednesday though.
I have been changing my stock list a bit over the last couple of months to try to reduce my risk, too. I've never yet seriously regretted selling before the top, especially when I've made some pocket money on the way up.