How international market forces affect NZ property

[Jeffa]

FYI,

In his book, Cagan defined a hyperinflationary episode as starting in the month that the monthly inflation rate exceeds 50%, and as ending when the monthly inflation rate drops below 50% and stays that way for at least a year.

Economists usually follow Cagan's description that hyperinflation occurs when the monthly inflation rate exceeds 50% (this is equivalent to a yearly rate of 12974.63%

Some countries currently experiencing high inflation in the table below.

Something to think about - how are the residents of those countries are coping with high rates of inflation?

.

I'll be in Turkey this September/October for a month, it will be interesting to spend some time with the locals to get an idea how they have lived through hyperinflation.

[Jeffa]

I'll be in Turkey this September/October for month, it will be interesting to spend some time with the locals to get an idea how they have lived through hyperinflation.

Turkish mortgage rates are 23%, yet cpi is a whopping 53%

It will be a very educational holiday but they seem to be surviving somehow, Im fascinated to find out what individuals did with their worthless Turkish lira, and have a cheap holiday of course.

[Chris W]

Turkish mortgage rates are 23%, yet cpi is a whopping 53%

It will be a very educational holiday but they seem to be surviving somehow, Im fascinated to find out what individuals did with their worthless Turkish lira, and have a cheap holiday of course.

Two interesting questions to potentially ask:

1) how are those residents who can only earn Turkish Lira and without offshore help (e.g relatives offshore), surviving? e.g teachers in local government funded schools, nurses in local government funded hospitals, rubbish collectors, other employees in local government funded services, pensioners / retirees who rely on government pension benefits, etc
2) what are the various ways that the above residents can obtain foreign currency such as US dollars, Euro, etc, locally?

Have talked to some people who were affected by high inflation in Argentina and Zimbabwe - quite interesting how local residents adapted to changing economic conditions.

[Jeffa]

[Jeffa]

Australian CPI down to 6.8% from 7.4%

Expectations was for 7.1%

Well done OZ,

What's up with the 2 gingas running our country? Do they even know what there doing?

[Frezzinghot]

Gingas haha

[Keys]

there haha

[Jeffa]

Tova Hahaha

[Jeffa]

Nasdaq composite index which consists of High growth and mega cap companies like Apple, Microsoft, Amazon, Tesla etc is on track to finish it's best quarter since the scamdemic in 2020

Why?

the market is pricing in a pivot from the Fed in the second half of this year
How's this effect New Zealand house prices?

Lower Fed fund rate means lower swap rates, or higher offers on real estate (you can basically borrow more) NZ housing market always follows the share market ~ 9 month or so lag

Why?

The share market is the economy.

[Frezzinghot]

https://youtu.be/sRY04K1sKCc

the inverted yield curve. What come next I wonder?

[Jeffa]

https://youtu.be/sRY04K1sKCc

the inverted yield curve. What come next I wonder?

Watch at 16:20 he's saying the next 90 days , like Jeffa, Gammons following the bond market.

3 month yields are pricing in a Fed rate cut.

[Frezzinghot]

Watch at 16:20 he's saying the next 90 days , like Jeffa, Gammons following the bond market.

3 month yields are pricing in a Fed rate cut.

Yes I found that information outstanding. When they pivot how long is it before out rates start to lower? Is it slowly or under urgency as the banks profits decline?

[Jeffa]

Nasdaq composite index which consists of High growth and mega cap companies like Apple, Microsoft, Amazon, Tesla etc is on track to finish it's best quarter since the scamdemic in 2020

Why?

the market is pricing in a pivot from the Fed in the second half of this year
How's this effect New Zealand house prices?

Lower Fed fund rate means lower swap rates, or higher offers on real estate (you can basically borrow more) NZ housing market always follows the share market ~ 9 month or so lag

Why?

The share market is the economy.

Nasdaq composite index is similar to the world renowned speculative NZ real estate market, some years the most expensive in the world compared to income.

Invest a 100k into a company expecting(hoping)someone to buy it back off you 3 to 5 times it's original purchase price.

This is why the Nasdaq crashed in 2022 -30% on increasing interest rates, this is also why it just had its best quarter since 2020 and one of the best in over a decade, because bond market is pricing rate cuts.

Lower interest rates increase margin profitability on these high growth speculative tech companies

Lower interest rates increase borrowing power and higher growth to our speculative Real estate market...its how I retired in my 40s.

[Jeffa]

Yes I found that information outstanding. When they pivot how long is it before out rates start to lower? Is it slowly or under urgency as the banks profits decline?

Depends on our banks at auctions when buying the lol (debt), each bank is different.

Like a dodgey house auction in South Auckland..

[Jeffa]

Today FM was never going to survive the upcoming recession and high interest rate environment.

It's no different to these mega cap companies Apple , Facebook, Tesla etc shedding 10s of thousands of workers, advertiser's need to save money during recession and the market including these mainstream and social media companies have priced in the down turn to their revenues

Tova and co are victims of the Fed and our central bank tightening, deal with it...

The good news is, stronger better companies will rise from the ashes to replace weak mainstream media drivel.