Storm clouds.

Kea and I have been discussing what happens next. One option is that we hyperinflate. The natural thing that should be deflating because jobs are decreasing and income is down. But the cost of food is going up, and the government is basically printing money and penalizing saving. The storm clouds are here.

Item One:

It has happened. One bank has lowered its term deposit rate card so that no offers are above 1.00%.

ANZ has cut most of its rates, with their ‘highest’ now just 0.90% – and you need to commit to an eighteen month term to get that.

Recall, ANZ was also the first to cut below 2% in late May.

This latest push lower makes it clear there is no downside for banks. Depositors will continue to hold their balances at banks, shifting them to at-call accounts that actually pay zero interest.

The banks themselves know that they can get all the funds they need from the RBNZ in their upcoming Funding for Lending program at super discounted rates.

Term deposit interest is an income stream that has dried up.

With today’s ANZ move, almost all other banks will soon follow.

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Item Two:

Westpac is one of the big five banks, owned by Australia, and acts as the government’s banker.

Westpac New Zealand’s annual profit is down 43% thanks to a COVID-19 related surge in loan impairment charges, and as expenses rose and income fell.

Westpac NZ’s September year net profit after tax fell $414 million, or 43%, to $550 million from $964 million last year.

The fall came as the bank’s impairment charge jumped to $320 million versus a net impairment benefit of $10 million last year. Meanwhile, net operating income fell $133 million, or 6%, to $2.282 billion, with net interest income down $24 million, or 1%, to $1.943 billion. Operating expenses climbed $66 million, or 7%, to $1.059 billion.

“We’ve provisioned for an increase in expected lending losses due to changing economic conditions, largely driven by COVID-19. However, our underlying asset quality remains strong,” Westpac NZ CEO David McLean says.

McLean says Westpac NZ has provided mortgage and loan repayment assistance to 21,959 customers, and more than $9 billion of new and restructured business lending.

“Over the past year we’ve expanded our residential [mortgage] lending by 7% and have helped first home buyers into 5343 homes. We’ve increased our business lending by 3% and have been one of the few banks to expand our lending to farmers and agriculture,” McLean says.

The bank’s net loans grew 5% to $88 billion, and total deposits increased 10% to $71 billion. Westpac’s KiwiSaver funds under management increased 14% to $8 billion

Item three:

Air NZ is (as expected) laying off staff — but keeping their overseas (read cheaper) staff. The employees are beginning to revolt.

More than 1000 Air New Zealand staff have petitioned the airline’s management to save New Zealand jobs and stop outsourcing work, including cabin crew roles to Chinese nationals based in Shanghai.

But in response to the “Kia Kaha Aotearoa” petition, signed by 1287 staff, Air New Zealand chief executive Greg Foran said the airline would continue to outsource work in order to meet financial objectives set out in its new strategy called Kia Mau.

“I have empathy for your sentiment around outsourcing – that everything should be based in New Zealand, but unfortunately that is not always the best or most feasible business outcome,” Foran said in an internal memo on Thursday.

The call from staff comes following confirmation last week that about 385 international cabin crew would be made redundant, as well as 550 furloughed international cabin crew, who have not worked since July.

At the risk of repeating Nikolai, this is going to end poorly. Adjust your budget now. Get out of debt. And, if at all possible, be well away from crowds.

Remain anonymous. Be prepared to move to where it is safe. And have plans A, B and Z.

If like me your career is in a dangerously Woke field, it would be a good idea to start working towards a side project, additional skills, your own business and/or financial independence. This goal will probably take a long time.

Perhaps like Roosh you can start working construction.