I'm not saying the NZ economy isn't on very shaky ground right now, but that article is way off the mark
"Similarly, while growth in dairy consumption by Chinese households was massive, it was going to have its limits."
Except, dairy prices have been about the same, or a mild increase over the past 5 years, and I would be surprised if we have reduced production over the past 5 years?
My gut feeling is that they dropped the interest rate more in reaction to the domestic housing market being now firmly decreasing - if they let it crash then the impact will be much worse to the national economy rather than letting it down easily.
This chart looks more amazing every time its updated (from AMP Report)
And this in the context of slowing earnings growth ....using Jarden numbers, NZ year-ahead EPS forecasts are 6% lower than they were one year ago....
At the top of every bubble, everyone is convinced it's not yet a bubble.
That chart above shows that at Jan 2012 the PE of the NZX was 13.3 ...when the index was 3400
The NZX is now 10,900 odd ..220% higher over 7 years ...about 18% pa (which does include reinvested divies)
But company profits measured by EPS have only increased by 4.0% pa
If the PE of the NZX50 had not expanded in the last 7 years it would be a miserable 4500 now
The happy market (ie improved sentiment / PE expansion) has driven 85% of the market gains in the last 7 years....company performance (increased profits) only 15%
Mr P as famous for saying the market giveth, but the market also taketh away. The market sure has given us heaps lately eh
At the top of every bubble, everyone is convinced it's not yet a bubble.
ASB cuts all its fixed mortgage rates again, taking market leading positions for many terms, after raising some very cheap funding. It cuts term deposit rates too
good to see ASB leading the charge , need too drop them further to help the economy. more money in peoples pockets is what needed for coming NZ down draft.
Every cafe I go to lately, I seem to be next to a table of white haired people talking about yield and how to get more of it.
Most of what they're thinking about makes sense - in 2011!
I don't know how many shots across the bow these folk will need, but the primary goal at this point should be capital preservation.
not surprised to hear grey power are concerned about yield.
there might be a wave of grey hair sweeping up queen st or where ever similar to scenes like hong kong when rates go negative. Anyway wonder if this is why ORR got made the RBNZ head
Think tank and lobbyist the NZ Initiative is concerned the Reserve Bank might "morph" into something resembling a sovereign wealth fund when they start QE
nzx50 probably take a big hit today i reckon , more than likely a2 leading the way.
double top formed on the dailies? time will tell. Also i see US and Japan have announced a trade agreement on sunday which may damage our dairy exports to japan
U.S. Trade Representative Robert Lighthizer also commented on the content of the proposed deal, which he said would open markets to $7 billion of products including ethanol, as well as beef, pork, dairy products and wine
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Originally Posted by Stranger_Danger
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