WARNING NZ$ under attack!!!!!!!!!
#16
Re: WARNING NZ$ under attack!!!!!!!!!
I have to agree with Paladin on this one, the NZ finance minister is just repeating the mistakes of Norman Lamont, (but without a call-girl tenant), he is wasting tax-payers money, the wealth of NZ is a drop in the ocean compared to the Hot-Money of speculators. The NZD will just go up and up in the short term now, NZD exports will be severly hit, but hopefully the outrageous house prices will start to flag too.
I have just noticed lardyl's post which says the same thing (but in a better, more amusing way)
I have just noticed lardyl's post which says the same thing (but in a better, more amusing way)
http://www.nzherald.co.nz/section/1/...ectid=10446180
http://www.nzherald.co.nz/section/1/...ectid=10446200
#17
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: WARNING NZ$ under attack!!!!!!!!!
I have to agree with Paladin on this one, the NZ finance minister is just repeating the mistakes of Norman Lamont, (but without a call-girl tenant), he is wasting tax-payers money, the wealth of NZ is a drop in the ocean compared to the Hot-Money of speculators. The NZD will just go up and up in the short term now, NZD exports will be severly hit, but hopefully the outrageous house prices will start to flag too.
I have just noticed lardyl's post which says the same thing (but in a better, more amusing way)
I have just noticed lardyl's post which says the same thing (but in a better, more amusing way)
#18
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: WARNING NZ$ under attack!!!!!!!!!
that NZ Herald article is *really*bugging me - how can anyone suggest that the landlords over here can justifiably raise their rentals by 100%???
"crockers hight" I say.................
rentals here (at least in/around AKL) are already way over the top vs. salaries, and these ruddy property investors are mithering that they are only grossing 3% p.a., well boo hoo - their property is supposed to be accumulating in value by about 14% p.a. and they are bloody writing any "losses" in their rental "businesses" off against their ruddy personal income tax liabilities so these "poor" landlords must be laughing all the way to the boat ramp!! Sod em ----- may their "investments" bunkrupt them rather than the whole damn country!!!!!!
Come the glorious revolution I'll have their backs against the wall...............
#19
Re: WARNING NZ$ under attack!!!!!!!!!
What a scary forecast with both stories!
http://www.nzherald.co.nz/section/1/...ectid=10446180
http://www.nzherald.co.nz/section/1/...ectid=10446200
http://www.nzherald.co.nz/section/1/...ectid=10446180
http://www.nzherald.co.nz/section/1/...ectid=10446200
#20
Re: WARNING NZ$ under attack!!!!!!!!!
No the point of that is that they can't increase the rents much because no-one will pay it as due to overinvestment there is still a pretty good supply of rentals in most areas. Rents have been going up by only about the rate of inflation while property has been going up by 10%+ for some time now. Also if rent goes up then inflation will go up and so interest rates will have to go up again.
#21
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: WARNING NZ$ under attack!!!!!!!!!
No the point of that is that they can't increase the rents much because no-one will pay it as due to overinvestment there is still a pretty good supply of rentals in most areas. Rents have been going up by only about the rate of inflation while property has been going up by 10%+ for some time now. Also if rent goes up then inflation will go up and so interest rates will have to go up again.
But then Kiwis are not the most patient of financeers it would appear by the number of radio ads suggesting that you will get a better return here, there or somewhere - or is that just because there is less regulation and less corporate governance here - a la the FSA ??? and that people go it alone on the investment front rather than paying a fund manager to do it??
I've still lots to learn, heh?
#22
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: WARNING NZ$ under attack!!!!!!!!!
Japanese grannies trounce Kiwi bank
By Ambrose Evans-Pritchard
Last Updated: 2:10am BST 19/06/2007
Japan's day-trading grannies and housewives have overwhelmed New Zealand's central bank, driving the Kiwi dollar to record highs against the yen despite heavy intervention.
The bank's attempt to hold the line by flooding the market with Kiwis from its reserve fund appears headed for failure as Japanese investors and hedge funds renew the assault.
Some 600,000 Japanese citizens have currency trading accounts. They are mostly women playing the futures markets, some making small fortunes using "Doji candlestick" chart techniques. Last year they traded an estimated $11bn (£5.5bn) a day.
The less nimble stick to ''uridashi'' foreign-currency bonds to escape the miserable returns in Japan, where interest rates are still 0.5pc. The favourite target is New Zealand, now offering 8pc rates to check a property boom and surging food prices.
New Zealand's intervention is the first time since 2000 that a central bank from the OECD club of rich countries has jumped directly into the currency markets to confront speculators.
While the shock move caused panic last week, the effect is rapidly wearing off. The Kiwi dollar has blasted through to a fresh high of yen93.16 against the yen.
Kiwi bulls shrugged off the latest round of intervention yesterday, but the currency has yet to break resistance against the US dollar.
Clifford Bennett, chief economist at FxMax said the strategy was doomed to fail. "It's a relatively small bank and once the speculators know the level being defended, the game is on. The intervention will have decreasing effect until finally the market runs dramatically higher."
Prime Minister Helen Clark said it was "entirely a matter" for the central bank.
Capital inflows into New Zealand have made it near impossible for the central bank to manage the economy, forcing it to pursue a "scorched earth" policy that has driven the currency up 31pc against the yen this year.
The current account deficit is almost 10pc of GDP and exporters are shifting plant overseas or shutting down.
http://www.telegraph.co.uk/money/mai.../cnkiwi119.xml
By Ambrose Evans-Pritchard
Last Updated: 2:10am BST 19/06/2007
Japan's day-trading grannies and housewives have overwhelmed New Zealand's central bank, driving the Kiwi dollar to record highs against the yen despite heavy intervention.
The bank's attempt to hold the line by flooding the market with Kiwis from its reserve fund appears headed for failure as Japanese investors and hedge funds renew the assault.
Some 600,000 Japanese citizens have currency trading accounts. They are mostly women playing the futures markets, some making small fortunes using "Doji candlestick" chart techniques. Last year they traded an estimated $11bn (£5.5bn) a day.
The less nimble stick to ''uridashi'' foreign-currency bonds to escape the miserable returns in Japan, where interest rates are still 0.5pc. The favourite target is New Zealand, now offering 8pc rates to check a property boom and surging food prices.
New Zealand's intervention is the first time since 2000 that a central bank from the OECD club of rich countries has jumped directly into the currency markets to confront speculators.
While the shock move caused panic last week, the effect is rapidly wearing off. The Kiwi dollar has blasted through to a fresh high of yen93.16 against the yen.
Kiwi bulls shrugged off the latest round of intervention yesterday, but the currency has yet to break resistance against the US dollar.
Clifford Bennett, chief economist at FxMax said the strategy was doomed to fail. "It's a relatively small bank and once the speculators know the level being defended, the game is on. The intervention will have decreasing effect until finally the market runs dramatically higher."
Prime Minister Helen Clark said it was "entirely a matter" for the central bank.
Capital inflows into New Zealand have made it near impossible for the central bank to manage the economy, forcing it to pursue a "scorched earth" policy that has driven the currency up 31pc against the yen this year.
The current account deficit is almost 10pc of GDP and exporters are shifting plant overseas or shutting down.
http://www.telegraph.co.uk/money/mai.../cnkiwi119.xml
#23
Re: WARNING NZ$ under attack!!!!!!!!!
Japanese grannies trounce Kiwi bank
By Ambrose Evans-Pritchard
Last Updated: 2:10am BST 19/06/2007
Japan's day-trading grannies and housewives have overwhelmed New Zealand's central bank, driving the Kiwi dollar to record highs against the yen despite heavy intervention.
The bank's attempt to hold the line by flooding the market with Kiwis from its reserve fund appears headed for failure as Japanese investors and hedge funds renew the assault.
Some 600,000 Japanese citizens have currency trading accounts. They are mostly women playing the futures markets, some making small fortunes using "Doji candlestick" chart techniques. Last year they traded an estimated $11bn (£5.5bn) a day.
The less nimble stick to ''uridashi'' foreign-currency bonds to escape the miserable returns in Japan, where interest rates are still 0.5pc. The favourite target is New Zealand, now offering 8pc rates to check a property boom and surging food prices.
New Zealand's intervention is the first time since 2000 that a central bank from the OECD club of rich countries has jumped directly into the currency markets to confront speculators.
While the shock move caused panic last week, the effect is rapidly wearing off. The Kiwi dollar has blasted through to a fresh high of yen93.16 against the yen.
Kiwi bulls shrugged off the latest round of intervention yesterday, but the currency has yet to break resistance against the US dollar.
Clifford Bennett, chief economist at FxMax said the strategy was doomed to fail. "It's a relatively small bank and once the speculators know the level being defended, the game is on. The intervention will have decreasing effect until finally the market runs dramatically higher."
Prime Minister Helen Clark said it was "entirely a matter" for the central bank.
Capital inflows into New Zealand have made it near impossible for the central bank to manage the economy, forcing it to pursue a "scorched earth" policy that has driven the currency up 31pc against the yen this year.
The current account deficit is almost 10pc of GDP and exporters are shifting plant overseas or shutting down.
http://www.telegraph.co.uk/money/mai.../cnkiwi119.xml
By Ambrose Evans-Pritchard
Last Updated: 2:10am BST 19/06/2007
Japan's day-trading grannies and housewives have overwhelmed New Zealand's central bank, driving the Kiwi dollar to record highs against the yen despite heavy intervention.
The bank's attempt to hold the line by flooding the market with Kiwis from its reserve fund appears headed for failure as Japanese investors and hedge funds renew the assault.
Some 600,000 Japanese citizens have currency trading accounts. They are mostly women playing the futures markets, some making small fortunes using "Doji candlestick" chart techniques. Last year they traded an estimated $11bn (£5.5bn) a day.
The less nimble stick to ''uridashi'' foreign-currency bonds to escape the miserable returns in Japan, where interest rates are still 0.5pc. The favourite target is New Zealand, now offering 8pc rates to check a property boom and surging food prices.
New Zealand's intervention is the first time since 2000 that a central bank from the OECD club of rich countries has jumped directly into the currency markets to confront speculators.
While the shock move caused panic last week, the effect is rapidly wearing off. The Kiwi dollar has blasted through to a fresh high of yen93.16 against the yen.
Kiwi bulls shrugged off the latest round of intervention yesterday, but the currency has yet to break resistance against the US dollar.
Clifford Bennett, chief economist at FxMax said the strategy was doomed to fail. "It's a relatively small bank and once the speculators know the level being defended, the game is on. The intervention will have decreasing effect until finally the market runs dramatically higher."
Prime Minister Helen Clark said it was "entirely a matter" for the central bank.
Capital inflows into New Zealand have made it near impossible for the central bank to manage the economy, forcing it to pursue a "scorched earth" policy that has driven the currency up 31pc against the yen this year.
The current account deficit is almost 10pc of GDP and exporters are shifting plant overseas or shutting down.
http://www.telegraph.co.uk/money/mai.../cnkiwi119.xml
Why am I moving to NZ again???? The damn economy is going to hell in a handbasket! LOL!
Dave
#24
Re: WARNING NZ$ under attack!!!!!!!!!
This is just so embarassingly stupid. It makes no sense. Maybe my conspiracy theory was right though; Cullen just today floated the idea of ring-fencing losses from rental property, making them non-tax-deductible, which would go a long way towards slowing down the housing market. This would be impossibly unpopular normally but if they could appear completely powerless in the face of global currency pressures, requiring desperate measures to slow down inflation.... nah, still doesn't quite make sense. Maybe there is another shoe still to drop.
#25
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: WARNING NZ$ under attack!!!!!!!!!
This is just so embarassingly stupid. It makes no sense. Maybe my conspiracy theory was right though; Cullen just today floated the idea of ring-fencing losses from rental property, making them non-tax-deductible, which would go a long way towards slowing down the housing market. This would be impossibly unpopular normally but if they could appear completely powerless in the face of global currency pressures, requiring desperate measures to slow down inflation.... nah, still doesn't quite make sense. Maybe there is another shoe still to drop.
Dr Cullen confirmed in Parliament today that officials had suggested ring-fencing the losses from rental houses so they cannot be used to offset tax on other income, and he claimed that Inland Revenue supported the idea.
Its at:
http://www.newswire.co.nz/main/views...626&catid=3008
and it's not just Dr.Cullen but the IR and other advisors that are promoting the idea. And a damned good one it is too. Get on with it!
#26
Joined: Apr 2007
Posts: 1,454
Re: WARNING NZ$ under attack!!!!!!!!!
A country that ranks about 190th in the world for population density has a property bubble.
laugh or cry?
#27
Re: WARNING NZ$ under attack!!!!!!!!!
#28
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: WARNING NZ$ under attack!!!!!!!!!
This has a pretty good analysis of one of the main drivers for it: low supply caused by trendy town planners. http://www.interest.co.nz/HLA/Demogr...0June%2007.pdf
as you will gather from my earlier posts I am all for a large needle in this bubble!! maybe the capital gains tax and removal of the 16 year old tax break on rental "losses" could do that - as I recall UK abolished MIRAS relief on mortgage payments about 15 years ago and the world did not end!!
listening to some of the property "investors" on newstalk ZB on the way back from New Plymouth tonight who were trying to justify owning 5 or so properties here in order to put a roof over the heads of the less fortunate (really utter garbage, even the right-leaning presenter could not get their logic!!) - suggests that these salivating property hungry "investors" can be utter idiots and they are the ones laughing all the way to the boat ramp/lifestyle block whilst the rest of NZ has to pick up the pieces.....
#29
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: WARNING NZ$ under attack!!!!!!!!!
Onward and upward for the Kiwi$ - Hope it turns before September
Todays Financial Times
Kiwi advances to fresh highs
Published: June 21 2007 12:03 (UK Time)
The New Zealand dollar powered to fresh highs on Thursday as investors continued to test the resolve of the country’s central bank.
The Reserve Bank of New Zealand intervened to stem the kiwi’s rise at the beginning of last week, and was rumoured to have stepped in again on Monday.
However analysts said strong appetite for carry trades, in which low-yielding currencies are sold to fund the purchase of higher-yielding currencies, had continued to support the New Zealand dollar.
The kiwi rose to a record high on a trade weighted basis, and climbed to a fresh 22-year high against the dollar of $0.7658 and a 20-year peak of Y94.69 against the yen.
Although the New Zealand dollar later eased back to $0.7622 and Y94.22, it was still up 0.5 per cent and 0.4 per cent on the session against the dollar and yen respectively.
“It took about a week and a half, but the kiwi has convincingly shrugged off the RBNZ’s intervention,” said David Woo at Barclays Capital. “So far there are no signs of the RBNZ stepping in and in their absence the currency continues to look bid with carry continuing to be the main driver.”
Todays Financial Times
Kiwi advances to fresh highs
Published: June 21 2007 12:03 (UK Time)
The New Zealand dollar powered to fresh highs on Thursday as investors continued to test the resolve of the country’s central bank.
The Reserve Bank of New Zealand intervened to stem the kiwi’s rise at the beginning of last week, and was rumoured to have stepped in again on Monday.
However analysts said strong appetite for carry trades, in which low-yielding currencies are sold to fund the purchase of higher-yielding currencies, had continued to support the New Zealand dollar.
The kiwi rose to a record high on a trade weighted basis, and climbed to a fresh 22-year high against the dollar of $0.7658 and a 20-year peak of Y94.69 against the yen.
Although the New Zealand dollar later eased back to $0.7622 and Y94.22, it was still up 0.5 per cent and 0.4 per cent on the session against the dollar and yen respectively.
“It took about a week and a half, but the kiwi has convincingly shrugged off the RBNZ’s intervention,” said David Woo at Barclays Capital. “So far there are no signs of the RBNZ stepping in and in their absence the currency continues to look bid with carry continuing to be the main driver.”
#30
Re: WARNING NZ$ under attack!!!!!!!!!
Not wanting to pretend to know what's going on with the NZ dollar, but can i ask, is the NZ dollar only strong at the moment, because of the relative weakness of the US dollar? How likely is it that the NZ dollar will remain strong for the foreseable future?