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VIDEO: Climbing profits: a firm from a hobby

BBC Economics - Wed, 07/10/2015 - 01:50
Joanne Soo runs an adventure company that takes people abseiling and mountain climbing.
Categories: Economic News

NZ diplomat involved in decision to buy $6.2m luxury Hawaiian mansion

Stuff Business - Wed, 07/10/2015 - 01:48
A New Zealand diplomat was part of a team to inspect a $6.2 million Hawaii mansion, which was later purchased by the Government as a home for him and his wife. 
Categories: Economic News

A review of things you need to know before you go home on Wednesday; ACC milestone, smaller mortgages approved, September rents, new union, TPP twice the China FTA, NZD higher News - Wed, 07/10/2015 - 01:44
Image sourced from

Here are the key things you need to know before you leave work today.

There are no changes to report today.

NBS cut term deposit rates today by -5 to -15 bps.

While the number and value of new mortgages approved last week were within the recent tight ranges, the average approval amount was not, falling quite noticeably. Borrowers are being approved for the same number of loans, but the amount is lower. It is not clear whether this is just a one-off dip, or the start of a trend.

Not only is ACC reducing its 'premiums', it has also finally built enough provisions to cover its expected actuarial liabilities. It is a significant milestone with the Scheme reaching full funding in 2014/15. It has taken 41 years to get on top of their unfunded liabilities. (Now the only major unfunded Government liability is New Zealand Superannuation - and that one is unfunded to the tune of some $325 bln (after deducting the NZ Super Fund, and the value of KiwiSaver). The GSF also has unfunded liabilities of some $10 bln. At least it is good to get the ACC one sorted.)

The September data from the MED Tenancy Bond Service for September shows no changes in median rents for last month. Rents for 3 br Auckland houses slipped marginally to $590 per week, as did rents for 2 br flats ($412/week). There were also only tiny shifts in Wellington and Christchurch for similar accommodation.

New Zealand has a new union. E tū has been formed through the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. E tū says it represents more than 50,000 people working in the likes of the aviation, construction, journalism, food manufacturing, mining and cleaning sectors. Bill Newson, E tū national secretary, said all workers not in a union should take notice, with E tū here to help them achieve higher wages, better conditions and fair employment laws.

Here is a useful perspective from Westpac's senior economist Michael Gordon of the TPP: "while the degree of access for dairy exports is disappointing, we shouldn’t lose sight of the fact that the agreement as a whole provides significant tariff savings for New Zealand’s exports – estimated at $259 mln a year, compared to $115 mln a year in the New Zealand-China Free Trade Agreement. Moreover, the experience of the China FTA shows that the gains overwhelmingly come from increased trade volumes. It’s up to New Zealand’s exporters to capitalise on the opportunities created by the TPP – which is why it’s so hard to quantify the benefits in advance."

Despite small rises on Wall Street overnight and the stronger dairy prices, wholesale swap rates are all unchanged today, as is the 90 day bank bill rate, holding at 2.83%.

The Kiwi dollar has moved higher again today. A weaker USD and better dairy prices are behind the moves. It is currently at 65.6 USc, 91.4 AUc and 58.2 euro cents. The TWI-5 is now at 70 again. Check our real-time charts here

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates 536) { var b = arr.length - 536; // to get last 36 points } else if (arr.length < 536) { var b = 537 - arr.length; } else if(arr.length == 536) { var b=2; } // to generate the format for date representation in x axis var timestamweek = 604800000; var timestamday = 86400000; var timestammonth30 = 2592000000; var timestammonth31 = 2678400000; var timestamyear = 31536000000; var timestamquarterly = 7776000000; for (var u=0;u<2;u++) { arr[u] = parseLineCSV(arr[u]); fomat= String(arr[u][0]); var k=0; do { k++; } while(fomat.charAt(k)!="-") var k1 =k; do { k++; } while(fomat.charAt(k)!="-") var k2=k; do { k++; } while(k c_year) { var yy = "19"+fomat.substring(k2+1,k3+1); } else if(c_data == c_year) { var yy = "20"+fomat.substring(k2+1,k3+1); } // conversion of months into numerical form //+++++++++++++++++++++++++++++++++++ if (mm == "Jan") { mm= "01"; } else if (mm == "Feb") { mm= "02"; } else if (mm == "Mar") { mm= "03"; } else if (mm == "Apr") { mm= "04"; } else if (mm == "May") { mm= "05"; } else if (mm == "Jun") { mm= "06"; } else if (mm == "Jul") { mm= "07"; } else if (mm == "Aug") { mm= "08"; } else if (mm == "Sep") { mm= "09"; } else if (mm == "Oct") { mm= "10"; } else if (mm == "Nov") { mm= "11"; } else if (mm == "Dec") { mm= "12"; } // +++++++++++++++++++++++++++++++++++++++++++++++++++++++ var date = mm+"/"+dd+"/"+yy; var timestam_1 = Date.parse(date); var timestam= timestam_1+86400000; //86400000 added to get correct timezone output from Date.parse var time4 = new Date(timestam); var Weeko = time4.getDay(); var dd2 = time4.getDate(); var mm2 = time4.getMonth(); var flag_y=arr[i][1]; var ahref_title="Click here for full story"; if(arr[i][2]) { var url=arr[i][2]; var flag_date='{"x":'+timestam+', "title":"  ","text":"Click here for Story!"}'; flagAr[csvgen_counter].push(flag_date); } var yy2 = time4.getFullYear(); var yy3 = yy2+""; var yy4= yy3.substring(2,4); //++++++++++++++++++++++++this for days conversion++++++++++++++++++++++++++++ if (Weeko==1) { Weeko = "Mon"; } else if (Weeko==2) { Weeko = "Tue"; } else if (Weeko==3) { Weeko = "Wed"; } else if (Weeko==4) { Weeko = "Thu"; } else if (Weeko==5) { Weeko = "Fri"; } else if (Weeko==6) { Weeko = "Sat"; } else if (Weeko==0) { Weeko = "Sun"; } //+++++++++++++++++++++++this is for month conversion+++++ if (mm2==0) { mm2 = "Jan"; } else if (mm2==1) { mm2 = "Feb"; } else if (mm2==2) { mm2 = "Mar"; } else if (mm2==3) { mm2 = "Apr"; } else if (mm2==4) { mm2 = "May"; } else if (mm2==5) { mm2 = "Jun"; } else if (mm2==6) { mm2 = "Jul"; } else if (mm2==7) { mm2 = "Aug"; } else if (mm2==8) { mm2 = "Sep"; } else if (mm2==9) { mm2 = "Oct"; } else if (mm2==10) { mm2 = "Nov"; } else if (mm2==11) { mm2 = "Dec"; } //++++++++++++++++++++++++++++++++++++++++ //weekly if ( timestamvar == timestamweek) { fomat2=dd2+"-"+mm2+"-"+yy4; padding_value=timestamweek; range_selector=2; } // Daily else if ( timestamvar < timestamweek) { fomat2=dd2+"-"+mm2+"-"+yy4; padding_value=timestamday; range_selector=2; } // Yearly else if ( timestamvar >= timestamyear) { fomat2=mm2+"-"+yy4; padding_value=timestamyear; range_selector=3; } //monthly else if ((timestamvar <= timestammonth30)&&(timestamvar <= timestammonth31)) { fomat2=mm2+"-"+yy4; padding_value=timestammonth30; range_selector=2; } // Quarterly else if (timestamvar >= timestamquarterly) { fomat2=mm2+"-"+yy4; padding_value=timestamquarterly; range_selector=3; } else { fomat2=dd2+"-"+mm2+"-"+yy4; padding_value=timestamday; range_selector=3; } arr[i][0]= fomat2; var decpad; decpad = parseFloat(arr[i][1]); arr[i][1] = decpad; if(i==(arr.length-1)) { // Functionality to get the last value var xvalu=dd2+"-"+mm2+"-"+yy4; var yvalu= String(arr[i][1]); var xyvalu="Latest value at "+xvalu+" is "+yvalu; updt="Updated on "+xvalu; } tempAr.push(timestam); if(!arr[i][1]) { arr[i][1]=null; } yaxisAr[csvgen_counter].push(arr[i][1]); // tempAr1.push(timestam); // tempAr2.push(tempAr1); tempAr.push(arr[i][1]); last_val=timestam; finalAr[csvgen_counter].push(tempAr); } xpad=last_val+padding_value; //*****************to end up graph early////// if(arr[i]== "") { vi=arr.length-i; arr.length=arr.length-vi; i=arr.length-1; fomat = replic; var k=0; do { k++; } while(fomat.charAt(k)!="-") var k1 =k; do { k++; } while(fomat.charAt(k)!="-") var k2=k; do { k++; } while(k= timestamyear) { fomat2=mm2+"-"+yy4; } //monthly else if ((timestamvar <= timestammonth30)&&(timestamvar <= timestammonth31)) { fomat2=mm2+"-"+yy4; } // Quarterly else if (timestamvar >= timestamquarterly) { fomat2=mm2+"-"+yy4; } arr[i][0]= fomat2; var decpad; decpad = parseFloat(arr[i][1]); //arr[i][1] = roundVal(decpad); arr[i][1] = decpad; if(i==(arr.length-1)) { var xvalu=dd2+"-"+mm2+"-"+yy4; var yvalu= String(arr[i][1]); var xyvalu="Latest value at "+xvalu+" is "+yvalu; updt="Updated on "+xvalu; } } } } //other required functions //chart configuration starts here function getXMLHttpRequest(file) { //var arrSignatures = ["MSXML2.XMLHTTP.5.0", "MSXML2.XMLHTTP.4.0", //"MSXML2.XMLHTTP.3.0", "MSXML2.XMLHTTP", //"Microsoft.XMLHTTP"]; //for (var i=0; i < arrSignatures.length; i++) { try { var xmlhttp = new window.XMLHttpRequest();"POST",file,false); return xmlhttp; } catch(e) { error=e.message; } //} throw new Error("MSXML is not installed on your system."); } function readCSV(locfile) { // load a whole csv file, and then split it line by line var req = new getXMLHttpRequest(locfile); //"POST",locfile,false); req.send(""); return req.responseText.split(/\n/g); } function parseLineCSV(lineCSV) { // parse csv line by line into array var CSV = new Array(); lineCSV = lineCSV.replace(/,/g," ,"); lineCSV = lineCSV.split(/,/g); // This is continuing of 'split' issue in IE // remove all trailing space in each field for (var i=0;i=0) { for (var j=fstart+1;j<=i;j++) { lineCSV[fstart]=lineCSV[fstart]+","+lineCSV[j]; lineCSV[j]="-DELETED-"; } fstart=-1; } } fstart = (lineCSV[i].match(/^"/)) ? i : fstart; } var j=0; for (var i=0;i Charts loading...Charts loading...Charts loading...Charts loading...Charts loading...Charts loading...Charts loading...
Categories: Economic News

Samsung profit forecast up 80%

BBC Economics - Wed, 07/10/2015 - 01:42
Electronics giant Samsung estimates its third quarter operating profit will be 7.3t won ($6.29bn; £4.13bn) - up 79.8% from a year earlier.
Categories: Economic News

Samsung, Ikea, Coca-Cola, NAB and Kleenex head list of Choice Shonky Award winners for 2015

Stuff Business - Wed, 07/10/2015 - 01:38
Ikea's "leather" couches, Kleenex's "flushable" wet wipes and NAB's "low" rate credit cards have each snagged a Shonky Award for delivering the opposite of what was sold to consumers in Australia.
Categories: Economic News

The Two Major Factors That Will Drive Markets In Q4 According To SocGen (Spoiler: Not The Fed)

Zero Hedge - Wed, 07/10/2015 - 01:29

In the aftermath of the Fed's September fiasco, in which Yellen single-handedly cost the Fed years if not decades of carefully scripted "credibility", and more than unleashing a selloff has gotten us to the point where even Tier 1 banks admit that "market participants have started to question the effectiveness of monetary policy, with good reason", we were shocked to learn that at least according to Socgen, the Fed is no longer a major factor driving the market in the fourth quarter.

Here is SocGen's explanation of how the Fed lost credibility.

Monetary policy: central banks take a back seat


Last month, neither the ECB’s threat to expand its QE programme nor the delay in the Fed’s rate hike succeeded in stopping the equity sell-off. Market participants have started to question the effectiveness of monetary policy, with good reason. With still a large debt overhang in many developed economies, further easing is unlikely to boost credit demand significantly from current levels. Moreover, easy financial conditions have led to a growing divergence between modest global growth and frothy valuations. This divergence culminated earlier this year in an S&P 500 P/B ratio at 2.9x (a level last seen on the eve of the Great Recession): a correction was overdue. Although growth is expected to remain solid in developed economies, corporates are now facing external headwinds, against which central banks have limited tools.


We can only hope that SocGen is right and that the Fed will no longer be a driving force for the market, but as everyone knows this is merely a pipe dream. If anything, the Fed - which will not hike rates in 2015 - is merely taking a sabbatical until next year, when it will be forced to decide between either delivering on its promise, or losing all credibility and going straight to NIRP/QE4+.

So if not the Fed then what, according to SocGen, will be the two major drivers behind the stock market in the last quarter of 2015? The answer:

1) China: to remain a headwind into 2016, but...


EM and, especially, commodity-dependent economies have been severely impacted by China’s slowdown this year. With globalisation, developed and emerging economies have become more integrated, thereby raising concerns of spillover effects spreading from EM to DM economies. But, DM economies seem to have been left relatively unscathed so far. This is because DM growth is mainly driven by stronger domestic spending, notably owing to lower commodity prices and better employment prospects. China should continue to weigh on global growth into 2016. But, we expect Chinese activity to stabilise somewhat near term, mostly due to a greater focus on infrastructure investment. Any sign of growth stabilisation in China could alleviate fears of a global recession: watch China’s leading indicators closely in Q4.



2) Earnings: strong divergence between sectors


US EPS growth has been very disappointing this year, with Q3 earnings likely to decline (yoy) for the second quarter in a row. Our Equity Quant team notes that profits growth has never been this weak outside of a recession. Consequently, risk aversion has increased, reinforced by fears of contagion across asset classes and notably the return of idiosyncratic risk in credit. The external headwinds of a strong USD, lower commodity prices and slower global demand should continue to weigh on sectors such as industrials, materials and energy. But, lower oil prices and a healthier job market (with the current soft patch likely to be transitory) are positive for US consumers, as reflected by strong spending data over the past months (+0.4% mom on average). As a result, sectors exposed to US consumption could still report solid EPS growth going forward. The eurozone recovery should also support earnings, allowing the Euro Stoxx to benefit from less demanding valuation levels.


If SocGen is right then enjoy the last day before Chinese stocks reopen after its week-long holiday. As for earnings season, if today's atrocious announcements by Yum Brands and Adobe are any indication, then not even a "recovering" China, one paradropping billions in debt rescue packages on top of insolvent banks, will be able to offset the acute earnings recession about to unfold.

Categories: Economic Blogs

New E tu union seeks relevance in changing labour market

Scoop NZ - Wed, 07/10/2015 - 01:17
Oct. 7 (BusinessDesk) - The newly formed E tu union, created through the merger of the Engineering, Printing and Manufacturing Union and the Service and Food Workers Union, wants to make organised labour relevant to workers again in a bid to catch ...
Categories: Economic News

Samsung's 3Q profit surges thanks to components, weak won

NZ Herald - Wed, 07/10/2015 - 01:15
SEOUL, South Korea (AP) " Samsung Electronics announced a forecast-beating profit for the third quarter Wednesday but analysts said strong component sales and favorable currency exchange rates masked persistent weakness in its smartphone...
Categories: Economic News

Guardian: Are they feeling the heat?

House Price Crash - Wed, 07/10/2015 - 01:06

"David Cameron will promise to sweep away planning rules that require property developers to build affordable homes for rent in a bid to increase the building of homes for first-time buyers. In a bid to shift from generation rent to generation buy, Cameron will say in his speech at the Conservative party conference on Wednesday that he hopes his new starter homes proposal can unblock housebuilding in the UK by abolishing demands that developers provide a certain amount of affordable housing to rent in new developments." I'm pretty cold towards all political parties when it comes to housing policy but who knows? Could the current lot have stumbled across something useful?

Categories: Economic News

Jetstar announces NZ - Rarotonga flights

NZ Herald - Wed, 07/10/2015 - 01:05
Qantas' budget offshoot Jetstar has announced it'll start flying between New Zealand and the Cook Islands from March next year."This is positive and exciting news for the Cook Islands," said Graeme West, general manager of Cook...
Categories: Economic News

Fortress Backs Hundred Million Dollar Subprime, Payday Lender Scheme: "He Has Peacock Feathers Tattooed Down His Left Arm"

Zero Hedge - Wed, 07/10/2015 - 01:01

“I don’t hide tattoos, I don’t take earrings out. I just don’t do that, because ultimately if you don’t like who I am, you’re not going to like what I do.”

Who knows what that is supposed to mean, but it’s a quote from Douglas Merrill who, as Bloomberg notes, “has peacock feathers tattooed down his left arm, black fingernail polish, [and] chin-length hair.”

Two other things Douglas has are a Ph.D. in cognitive science from Princeton and the online version of a payday lender called ZestFinance. 

Now make no mistake, payday lenders are bad because what they do is trap low-income households in a perpetual debt cycle and they do it in the name of providing credit to those who wouldn’t normally have access to it.

In other words: the pitch is that before you think about criticizing a payday lender for charging an APR that amounts to 30%, you should actually think about whether you should be praising them for helping America’s downtrodden debt serfs get into still more debt. 

Of course we’re employing quite a bit of trademark sarcasm here. Payday lenders have been proven time and again to be largely predatory in nature, capitalizing off of the desperation of poor people albeit with a business model that comes with substantial risk because.. well... because the business model depends on collecting interest payments from those same poor people who have just been made poorer-er-er by the fact that they took out yet another loan they most certaintly can't afford to service. 

Anyway, Fortress is ready to jump in on this to the tune of hundreds of millions:

“I don’t lie about who I am,” [Merrill] said in an interview from the startup’s headquarters among the pawn shops and souvenir stores on Hollywood Boulevard in Los Angeles. “I don’t hide tattoos, I don’t take earrings out. I just don’t do that, because ultimately if you don’t like who I am, you’re not going to like what I do.”


The funding from Fortress, which manages about $72 billion, will help ZestFinance make more of its Basix installment loans, which are capped at $5,000, last as long as three years and carry annual rates of up to 36 percent. Borrowers often use the money to consolidate credit-card debt or pay for medical expenses, Merrill said.


His unusual appearance in the financial world is a luxury he can afford. ZestFinance is among a crop of startups leading a technology-driven push to make lending easier and cheaper. Wall Street firms and other large institutional money managers have taken note, writing big checks to participate in the fast-growing businesses.


Avant Inc., one of ZestFinance’s competitors, said last week that it had raised $325 million from investors including private-equity firm General Atlantic and JPMorgan Chase & Co. Social Finance Inc., which helps borrowers from elite colleges consolidate student debt, said a day later that it raised $1 billion from investors including Japan’s SoftBank Group Corp. and affiliates of Dan Loeb’s hedge-fund firm Third Point LLC.


ZestFinance gained notoriety in recent years for its approach to underwriting some of the most challenging borrowers. By sifting through oceans of data, Merrill and his colleagues created models that are being used to provide an online alternative to payday loans. Still, they’re not cheap: Some carry annual percentage rates of as high as 390 percent.


What could possibly go wrong here?

Here's a guy with a PhD lending money provided by a firm whose cost of capital is basically zero to borrowers whose credit is terrible and these loans carry APRs that approach 400%. 

Let's call this what it is: this is just nonsense and what will end up happening is that these loans will end up in the collateral pool of a CDO at some point and the very same hedge funds and PE houses that are providing the financing will end up betting against the loans they effectively made in a hilarious Abacus CDO redux that mainstreet with neither care about, remember, nor understand, which will be great news for Merrill and Wall Street because that means they can continue to perpetuate the business model.

Categories: Economic Blogs

Super Fund seeks NZ investments with 'hometown advantages'

NZ Herald - Wed, 07/10/2015 - 01:00
The New Zealand Superannuation Fund is actively seeking new domestic investment opportunities where it believes it has "hometown advantages" but chief executive Adrian Orr said they're difficult to find at the scale it needs.The...
Categories: Economic News

US bosses bribe workers to take holiday in healing job market

NZ Herald - Wed, 07/10/2015 - 00:55
A self-diagnosed workaholic, Jeanette Russell knows that a real vacation requires her to completely unplug by deleting mobile email applications and letting her work laptop battery die in a corner. It's also company policy."When...
Categories: Economic News

Audrey Young: Groser hopes years add shine after limited TPP gains for dairy

NZ Herald - Wed, 07/10/2015 - 00:50
The TPP trade deal could be improved after a few years, Trade Minister Tim Groser said yesterday, acknowledging that New Zealand had lost against powerful forces that limited dairy sector rewards in the 12-country pact.He hoped...
Categories: Economic News

Troubled Mako Networks bought by US partner

NZ Herald - Wed, 07/10/2015 - 00:45
Mako Networks has been bought by a United States firm for $3 million.The Auckland-based network security provider owes around $26 million to Spark, which appointed receivers to the firm the day after the company's shareholders put...
Categories: Economic News

Commerce Commission clears Beijer to acquire Realcold

Scoop NZ - Wed, 07/10/2015 - 00:44
The Commission has given clearance for B100 Limited, a newly incorporated subsidiary of the Swedish refrigeration group Beijer Ref AB, to acquire the business and assets of Realcold Limited.
Categories: Economic News

KFC owner Yum shares down 17%

BBC Economics - Wed, 07/10/2015 - 00:42
Shares in Yum Brands, which owns KFC and Pizza Hut, fell more than 17% in after hours trading in the US after the firm reported poorer than expected quarterly results
Categories: Economic News

Jetstar flights will boost Cook Islands' Economy

Scoop NZ - Wed, 07/10/2015 - 00:41
Jetstar’s announcement today that it will fly direct from Auckland to Rarotonga from 22 March 2016 will be a significant boost for the Cook Islands’ economy - generating millions of dollars of on-island revenue.
Categories: Economic News
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