How international market forces affect NZ property

[Frezzinghot]

A bank run in NZ
1. Turn up at bank, and wait in the que with 4 other people.
2. Approximate wait time , 52 minutes.
3. Watch staff member deal with a confused old lady for 15 minutes.
4. Approach front bench and make case as to why they should actually give you your money back.
5. Produce ID and pass interrogation on what you intend to do with the folding.
6. Bank staff disappear, reappear, disappear, reappear again and advise that they don’t actually have that much cash on hand and you will need to come back tomorrow.
7. Realise that your money is not insured because the fat man isn’t in a hurry.
8. Panic.
9. Run out of bank.

Classic, but never a truer word was spoken!

[Frezzinghot]

JPMorgan: $2 trillion could be injected into the US banking system by the Federal Reserve's emergency loan program, that's 20% of it balance sheet

add to that China also injecting liquidity into its economy

Liquidity Liquidity Liquidity!!! Sweet Sweet Liquidity baby, house prices will triple by decades end in the big 3 cities!

Let the money printing begin...

But won’t this make the poor, poorer?

[Jeffa]

Fed issued this statement:

"As always, the Federal Reserve stands ready to provide liquidity through the discount window to all eligible institutions."

[Jeffa]

JPMorgan: $2 trillion could be injected into the US banking system by the Federal Reserve's emergency loan program, that's 20% of it balance sheet

add to that China also injecting liquidity into its economy

Liquidity Liquidity Liquidity!!! Sweet Sweet Liquidity baby, house prices will triple by decades end in the big 3 cities!

Let the money printing begin...

https://m-investing-com.cdn.ampproje...morgan-3031892

Yes this will be passed on in swap rates with NZ Banks.

[Jeffa]

Michael Gordon Westpac economists said the data prompted the Westpac research team to revise its cash rate peak to 5%, down from 5.5% previously.

“That implies only one more 25 basis point increase left in this cycle, which we still think will be delivered at the April OCR review”.

[Jeffa]

USD weakness as trader's start moving out of cash into risk assets, think Google,Amazon etc.

This strengthens the NZD which is less profitable for our exports, think Frontera, tourism ( tourism was already weaker than expected)

This is not looking good for an already weak NZ economy, RBNZ needs to stop raising rates and end QT immediately .

[Jeffa]

RBNZ just posted this:

"We are aware of the current financial stability issues with a small number of banks internationally. We are monitoring the situation closely, and are in regular contact with other regional regulators and regulated entities."


Jeffas translation:

RBNZ posted this as they have been receiving information from our local banks of a highly unusual increased amount of cash withdrawals...I mean if everything's fine, why post this on a Friday night??

[Jeffa]

Great chart to see what's coming with rates

[donna]

This looks interesting and sure to prop up confidence - and I think it's just between USA, ECB, Bank of Canada, Bank of Japan, and Swiss National Bank. I wonder why the UK and Aussie are not included.

cheers,

Donna

[McDuck]

.I mean if everything's fine, why post this on a Friday night??

Because people in groups are dumber than cattle.
Have you ever seen a heard of cows spook at absolutely nothing?, A falling leaf or an old paper bag?
Well, that's you.

[Jeffa]

UBS is buying Credit Suisse for cents in the dollar with Swiss government changing the laws to go ahead without shareholders approval.. sounds communist.

Credit Suisse share price will likely fall -75% on this news, this will have ramifications in NZ.

The Biden administration has asked Warren Buffet to invest in the small regional banks to help calm investors and depositors fears, I highly doubt he will unless he gets a government guarantee the government will cover any losses, he doesn't want to end his legacy on one bad investment (small U.S Banks)

The RBNZ will be monitoring these outcomes which will dictate our interest rates and house prices.

[Jeffa]

RBNZ and Federal reserve need to pause any rate hikes

An OCR hike by the RBNZ next month and the Fed this week will make no difference to inflation for another year.

They need to wait and watch what's happening with the other hundreds of US banks or thousands of international banks before any move in rates.

If another bank collapses, this will put panic and fear in the market leading to further bank runs,

All this is leading to deflation and what I have been saying for 2 years negative interest rates and the introduction of the CBDC.

[Jeffa]

This looks interesting and sure to prop up confidence - and I think it's just between USA, ECB, Bank of Canada, Bank of Japan, and Swiss National Bank. I wonder why the UK and Aussie are not included.

cheers,

Donna

Banks need dollar's, these international banks need to dump US treasuries and bonds, they need to swap yen for dollar's, Euro for dollars, so people can withdraw local currency in the local banks.

At this stage there is enough dollars at the Fed to swap for international currency... this will run out soon, if there is not enough money from international and the Federal reserve bank it's very likely all international banks including NZ will have to be re start printing money.

A run on our banks in New Zealand could mean credit and Flexi loans could be frozen if there is not enough kiwi dollars in our banking system.

[donna]

^^ when you say ‘credit loans’ are you talking existing - I.e. credit cards? Or new lending?

Donna

[Jeffa]

^^ when you say ‘credit loans’ are you talking existing - I.e. credit cards? Or new lending?

Donna

Revolving credit, they paused some back during the GFC, it would have to get quite ugly for this to happen, many small businesses use these as over draft accounts but they paused some back during the GFC.

I was thinking of moving some out as a precaution but what's the point, if you move it to another bank , that bank could freeze up.

I have 7 figures in credit lines so no bank is going to let me withdraw that amount in cash, the only thing that may protect me is my locs are with the big Australian banks and U.S trading bank brokerage accounts that are more capitalized and better insured than the banks in nz.

But let's be honest, is anyone really 100% safe?


A liquidity crunch is just that, if they don't start printing money again, they have to get it from somewhere.