OCR 11 June

ltgorman Wrote:
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> The births and deaths model the Bureau of Labor
> Statistics uses managed to add 220,000 jobs to the
> raw figures.

The births and deaths model is supposed to add jobs to the raw figures. Payrolls is a survey of businesses, and you can't survey new businesses (who tend to be the ones hiring) if you don't know that they exist. Trust me, these same objections came up during the so-called jobless recovery in 2002-03, and they were wrong then too.

> The U6 unemployment figure is at 16.4%

So the unemployment measure that is designed to be as high as possible is, in fact, high. What a shocker.

> The Fed hiking rates will only increase mortgage rates and put more pressure on households and the real estate market.

I don't think it will happen this year - I'm more interested in the fact that people are seriously contemplating it, knowing it would have those effects. It speaks a lot to their confidence about an impending recovery.

MikesRetirementFund Wrote:

>
> The births and deaths model is supposed to add
> jobs to the raw figures. Payrolls is a survey of
> businesses, and you can't survey new businesses
> (who tend to be the ones hiring) if you don't know
> that they exist. Trust me, these same objections
> came up during the so-called jobless recovery in
> 2002-03, and they were wrong then too.

It's function is not to only add the figures but also subtract. Its historical based modeling and is not accurate during economic turning points.

The bloomberg story you posted earlier actually had this criticism (or similar) in it before it was updated to be inline with all other green shoots stories.

Regardless, it'll be interesting to see what happens over the next 6 months.

At the rate 2yr and 5yr interest rates in NZ keep climbing the RBNZ will need to come out swinging given that their attempts to talk rates down have only short term success before markets focus their attention overseas again.

I think it will be a real 50:50 call on Thursday with the RB potentially signaling a cut in July if sticking on hold.

If the Fed can't keep US long rates down, surely the RBNZ wouldn't be stupid enough to think it can keep NZ long rates down? Then again....

I think this Thursday is really a 50:50 call - Bollard has said he still has faith in traditional monetary policy and has hinted at further rate cuts: [www.forbes.com]

JP Morgans analysis... for what its worth....

"There are four reasons we believe the RBNZ will deliver a rate cut. First, it will support the dovish commentary delivered by the Governor after the April decision. Second, it may prevent domestic banks from raising their mortgage rates, even though funding costs are elevated. Third, the RBNZ probably will make further downward revisions to its economic forecasts in the June Monetary Policy Statement, to be released this week. Fourth, recent NZD appreciation will be a key consideration given that monetary conditions have tightened."

[www.scoop.co.nz]

...and unfortunately if they do so it will backfire on the RBNZ again as it did in April. If they want to get longer-term rates down they need to convince investors that we will not have a second housing bubble under Bollard's watch. Jamming down the short-term rates is proving counterproductive.

This obsession with long-term mortgage rates is a recent phenomenon that's had its day; 1-2 year fixed has long been the standard and will be again from here on. But for what it's worth, I think the April statement was extremely successful in terms of what the RBNZ can actually hope to control - our long-term rates have only gone up half as much as overseas.

It's no-change.

That was strange - OCR.25 spiked to over $0.90 about a minute before the announcement!

I had my finger on the bailout trigger just seconds before RadioNZ read it out. I thought someone else must've gotten the news first. That was #!*@ing nerve-wracking. But yay me!

EDIT: The market maker switches back to ordering in blocks of one instead of twenty-five a few minutes before close. That's why the price jumped so much—probably one last-minute speculation would've done it.



Edited 1 time(s). Last edit at 06/11/2009 09:14AM by bkd.

Weird! someone bailed early from NC and started an avalanche, just heard the OCR as I was coming into work NC then switch the computer on and find it trading at .0045! managed to get a couple of big buys in before it hit the roof.... talk about timing!!

The website was timing out pretty badly.

@corbusian - yeah, I was watching that and the avalanche in NC made me think that they had cut (which was my view) so then I went and loaded up on OCR.SUB25 - and then got hammered when the real news came out.

As of midnight, my number one position is history

haha yea that was bazaar! website was too slow to gain from that large drop in NC but was worth the try. Bit odd that the dollar jumped up. Bring on the next announcement, NC anyone?

Right near the end the prices were all over the place. was looking at my profile telling me I lost a few hundred it's enough to give you heart failure.

Managed to keep the nerve though and came out on the up side

[blogs.nzherald.co.nz]

As I said on the other thread, still money to be made shorting sub 2.5 in my opinion.

Of course the only reason I am going on about it is because I already shorted some at 70 and I want them to move closer to fair value before I cover.

Hi - yes the site was running slowly this morning. We were timing out in the office too. Its ok now - a bit late I guess.

We thin the market maker's liquidity in the minutes before an announcement - a bit of self-preservation.

Well done, another correct OCR call from iPredict's traders. I'm pulling together an article for the ISCR looking at iPredict's predictions over the last year since our launch. Will be interesting to see the hit rate on OCR, RBA and others.



Edited 1 time(s). Last edit at 06/11/2009 10:23AM by admin.

Grats on those picking NC. Some huge jumps in Net Worth there Legs, Dibbo.

Some huge drops too! There's a big lesson here for those who trade in the last few minutes of a stock - don't use the stock price as your only indicator ...

Economist Wrote:
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> @corbusian - yeah, I was watching that and the
> avalanche in NC made me think that they had cut
> (which was my view) so then I went and loaded up
> on OCR.SUB25 - and then got hammered when the real
> news came out.
>
> As of midnight, my number one position is history
>

$1000 gone, ouch.