Financial Armageddon!!

[McDuck]

^^If New Zealand can have another 3months of negative growth, this wil force domestic inflation down and force the RBNZ to have a policy pivot like easing lending criteria.

It's already begun in China.

China is a special case.

Remember, you can't own land there.

All the provinces have a huge scam going via land rent.

So beyond consideration and comparison.

If anything, they are 12 months behind the global curve.


Big picture.. FED is still fighting inflation hard.. at any cost..

That's all you need to know.

[JBM]

Some real time indicator's of how the New Zealand economy is doing is the NZX50 down 18% YTD.
The bigger companies in New Zealand are a leading indicator on the financial health of the economy.

A weak currency shows a real time unwillingness to invest in our countries economy, The NZ dollar fell as low as 61c to USD which shows the lack of confidence in New Zealand businesses.

I see these negative economic indicators as a positive, because it's always darkest before the dawn

I was talking with a Energy company that has interests in NZ along with Aus -Indo ... I asked him if the company see's any potential in NZ going forward ... he was pretty blunt NO WAY NZ is not even on the radar ... far to expensive anti O&G Govt and NIMBYs

[Jeffa]

I was talking with a Energy company that has interests in NZ along with Aus -Indo ... I asked him if the company see's any potential in NZ going forward ... he was pretty blunt NO WAY NZ is not even on the radar ... far to expensive anti O&G Govt and NIMBYs

Depends on what your time horizon is, eventually markets do turn, nothing goes down forever, I'm far more optimistic about 2023 the worsening our economy becomes in the near term.

I tend to go against the current trend, I'm pessimistic when things are booming and optimistic when media talking about doom and gloom.

[chook]

"Food shortage crisis...this is the kicker, this is going to be huge and impact your average person causing unrest, rioting and a massive rise in crime. This is building as we speak and a perfect storm is causing this headed by a spike in fertilizer price and diesel prices, lets see what develops over the next few months."

Remember the Canadian trucking protest against mandates that spread around the world, well this is just one of the food protests happening currently, Dutch farmers have had enough of Govt restrictions. Supermarkets shelves are emptying out in the Netherlands. Expect more of this to spread globally..

https://www.youtube.com/watch?v=mswHVPD-j_o&ab_channel=ClydeDoSomething

[Jeffa]

^^Its quite interesting to see the protest in wealthy, developed economies from Anglo Saxon countries like Canada,NZ, Netherlands, Australia this past 12months.

Who knows, the next world war could be fought over political ideology.

[Perry]

Markets
Oil Plummets Below $100 as Recession Risks Come to Forefront. Oil extended its drop for a second day as fears of a global slowdown outweighed continued supply disruptions and market tightness.

[Perry]

..DANGER!
.........CINDY - ROBUSOM CONSTRUCTION CO AT WORK

[McDuck]

CINDY - ROBUSOM CONSTRUCTION AT WORK

Ha!
It's a nice way to look at it.

Gives some interesting insights.

What are the cards a country builds its economy upon.?

Image a country built totally on selling Crypto or tax haven status.
What about when we sold mostly kauri gum and flax.. not that long ago.

At least we have dairy products, and a bit of tech.
Thank you refrigerated shipping and the internet.
Tourism is a dud during covid.

Of course, selling land and companies to the Chinese was a short term win, but a long term disaster.
Selling lifestyle to overpopulated ex British empire colonies , another short term win, long term disaster.
Thank you, you know who...

But at least these latest trade trips (that the PM is making), impress me.
(Judge a person on what they do. not what they say, or other people tell you about them).

Shows me that they understand that a good economy is not the point of a country, but you can't deliver a good quality of life without one.

[Perry]

The full item is pay-walled, but non-subscribers can access two articles per day, free of charge.

---

China’s Ponzi banks are teetering
Ian Williams
12 July 2022

What began as a run on a handful of provincial banks is rapidly morphing into one of China’s worst financial scandals, threatening the stability of the country’s heavily indebted financial system. It poses a serious challenge to a Communist party obsessed with social order, which has thuggishly cracked down on desperate depositors demanding their money back.

At the weekend, protesters in Henan’s capital Zhengzhou were charged, beaten and dragged away by unidentified security officials dressed in white shirts and dark trousers, who appeared to be working in concert with uniformed police. An estimated 1,000 angry depositors had gathered in front of a branch of the People’s Bank of China, carrying banners that read ‘We are against Henan government’s corruption and violence’ and ‘No deposits, no human rights’.

[chook]

The full item is pay-walled, but non-subscribers can access two articles per day, free of charge.

---

China’s Ponzi banks are teetering
Ian Williams
12 July 2022

Coming to a country near you, surely this wouldnt happen in NZ.......surely??

[chook]

Coming to a country near you, surely this wouldnt happen in NZ.......surely??

I was talking to Olly Newland in 2008 as the GFC was happening, he said "Watch out for bank runs, get your money out of the bank!" I was a bit shocked, obviously it didnt happen but this time its all a lot bigger, its global and the whole house of cards is shaking.

[Chris W]

I was talking to Olly Newland in 2008 as the GFC was happening, he said "Watch out for bank runs, get your money out of the bank!" I was a bit shocked, obviously it didnt happen but this time its all a lot bigger, its global and the whole house of cards is shaking.

Yes, most people in NZ are blissfully unaware of these risks and the risks of financial stability of the financial system in NZ.

The RBNZ governor at the time was keeping watch of a potential depositor run on banks in NZ, after
1) the bank depositor run on Northern Rock in the UK, and
2) the collapse of the finance companies in NZ due to lack of liquidity & depositor runs. Heard two unrelated reports of families who had diversifed their deposits across multiple finance companies who ended up losing most of their deposits.

To reduce the risk of bank runs in NZ, the Government implemented the Crown Retail Deposit Guarantee Scheme in October 2008, which expired in December 2011.

Bank deposits in NZ are currently no longer guaranteed.

The RBNZ provided liquidity to banks during 2008 - 2009 period and government guarantee schemes also assisted in providing liquidity to the NZ banks in 2008 - 2009.

Anyone who understands banking crises is aware of potential risks of financial stability on the financial system and the potential impact on the economy and its residents.

The last time a bank in NZ needed a government recapitalisation was in 1990.

[Perry]

I do sincerely hope that NZ banks are free from the coercion and corruption common to all things communist Chinese.

[Chris W]

Those that are not positioned properly will get wiped out. I am not Joking.

During the GFC, one of the casualties was property mentor Dean Letfus who has been a member of this forum (under different account names).

https://www.stuff.co.nz/business/money/6051241/Property-Guru-declares-himself-bankrupt

[chook]

Yes, most people in NZ are blissfully unaware of these risks and the risks of financial stability of the financial system in NZ.

The RBNZ governor at the time was keeping watch of a potential depositor run on banks in NZ, after
1) the bank depositor run on Northern Rock in the UK, and
2) the collapse of the finance companies in NZ due to lack of liquidity & depositor runs. Heard two unrelated reports of families who had diversifed their deposits across multiple finance companies who ended up losing most of their deposits.

To reduce the risk of bank runs in NZ, the Government implemented the Crown Retail Deposit Guarantee Scheme in October 2008, which expired in December 2011.

Bank deposits in NZ are currently no longer guaranteed.

The RBNZ provided liquidity to banks during 2008 - 2009 period and government guarantee schemes also assisted in providing liquidity to the NZ banks in 2008 - 2009.

Anyone who understands banking crises is aware of potential risks of financial stability on the financial system and the potential impact on the economy and its residents.

The last time a bank in NZ needed a government recapitalisation was in 1990.

Didnt Cindy 'verbally' guarantee any NZer that had upto $50k in the bank, I recall this statement about a year or two ago?.

Also another option is "Kiwibonds" which instead of having your money in the bank it is basically held by the Govt at a very low rate of interest.