A number of sites targeted in cyber attacks

The NZX website had problems last week with sustained denial of service (DDOS) attacks that rendered the site unusable at times. RNZ and Stuff were also affected.

Stuff: Govt spy agency has ‘no clues’ on source of cyberattacks on NZX

The Government does not have any clues yet on who might be behind cyberattacks on the NZX, Radio NZ and Stuff, GCSB Minister Andrew Little says.

Little told Radio NZ that other organisations in Southeast Asia and North America had been subject to distributed denial-of-service (DDoS​) attacks that had the same “modus operandi” and the Government was working with its Five Eyes partners to investigate.

It is believed the criminals claimed in ransom notes sent to some victims ahead of attacks that they were associated with a notorious Russian group called Fancy Bear but Little believed that was “a decoy”.

Stuff spokeswoman Candice Robertson said Stuff had been targeted by a DDoS attack on Sunday which it had successfully defended itself against.

“Importantly, the Stuff site remains secure,” she said.

Radio NZ spokeswoman Charlotte McLauchlan said it had also experienced multiple DDoS attacks during the past 24 hours.

“We understand this may have been the same group that has been attacking the NZX and we are currently investigating,” she said.

“Our site remains secure and this has not impacted our audience.”

This week the problems have spread, with Metservice and TSB targeted yesterday and today, and some news sites (Stuff) also saying they have been attacked.

NZ Herald: MetService latest NZ organisation to be hit by targeted cyber attack, TSB experiences tech issues

MetService is the latest organisation to be hit by the same cyber attack that crashed the NZX website for five days.

The weather forecaster was hit by a DDoS (distributed denial of service) attack today, but a spokesman said it was dealt with “in a timely manner”.

TSB bank also responded to an incident causing disruption to some of its services this afternoon.

CEO Donna Cooper said the bank had informed the appropriate authorities and would continue to work closely with them on this.

Cooper declined to comment on whether the incident may have been related to a cyber attack.

But it also seems that blogs are being impacted in some way.

LPrent at The Standard: The background traffic is loud.

Along with the grey weather, the weather around our local net is downright annoying at present. There are a massive increase in attempts to break into this site via backend systems and brute force front-end logins, a surge in scans from the search engine spider bots, and a lot of requests for putting up paid content. All of which have been ignored or dealt with. Good thing that we aren’t a target like the NZX, banks, mainstream media and the MetService are. 

The BFD: Speed Issues affecting The BFD

We are all too aware of the slowness affecting The BFD at the moment and despite a huge amount of effort behind the scenes have yet to resolve this.

This issue is not specific to The BFD and is affecting a large number of sites all over the world.

It’s happened because the latest security update to the WordPress platform the site runs on does not play nicely with all the extra add ons that make the site look and work the way it does.

So both blogs say they are not being subjected to DDOS attacks, but it’s a curious coincidence.

Covid-19 up, markets down, down, down

The Covid-19 virus is getting worse in some places, especially Italy but it is also getting a hold in Spain.

And following a bad week on sharemarkets in the last two weeks there are even bigger drops this week, with the Dow Jones slumping.

At the same time oil prices have crashed by more than 20%.

The spread of the virus seems under control in New Zealand for now, but the economic effects are significant with Air New Zealand scaling back operations and many businesses under stress.

We may benefit from plunging oil prices, but our stock market (and Kiwisaver investments) is suffering, and it is likely to follow \world markets down and get worse today.

And problems around the world are much worse, especially currently in Italy where they are shutting down a lot of the country to try and stop the virus spreading.

Reuters: EU seeks to tackle coronavirus as Italy locks down north, prisoners riot

EU leaders will seek a coordinated response to the coronavirus after global markets plunged on Monday and Italy sealed off much of its industrial north, where six prisoners were killed in a riot over curbs on visits.

Joining the global rout, triggered by a 22% slump in oil prices, Wall Street’s main share indexes dropped 7% and the Dow Jones Industrials crashed 2,000 points – which would be its biggest ever one-day ever if there is no recovery by the close.

More than 110,000 people have been infected in 105 countries and territories, and 3,800 have died, the vast majority in mainland China, according to a Reuters tally.

With Italy’s economy already on the brink of recession, bars and restaurants in Lombardy were ordered to close or to restrict entry and maintain a distance of at least a meter between people on their premises.

Major sporting events in Italy, including top-flight Serie A football, will be played without spectators for a month.

This must have a major impact in the Italian economy. And the virus is spreading in Spain.

In Spain, schools were closed in the town of Labastida near Vitoria in the Basque country after nearly 150 cases of coronavirus were identified in the region.

Spain has reported 999 cases in all, most of them in two areas around Madrid and around Vitoria in the north. Prime Minister Pedro Sanchez said it had prepared an emergency plan to deal with the economic consequences of the virus.

It is improving in regions that were first hit.

China and South Korea, Asia’s second-worst-hit country, both reported a slowdown in new infections.

Mainland China, outside Hubei province, center of the outbreak, reported no new locally transmitted coronavirus cases for the second day on Monday, but a top Communist Party official warned people against dropping their guard.

South Korea reported 165 new coronavirus cases, bringing the national tally to 7,478, while the death toll rose by one to 51.

The New Zealand Government is rolling out economic measures.

Beehive: Cabinet approves Business Continuity Package in response to COVID-19

Cabinet today approved the development of a Business Continuity Package to help support the economy through the disruption caused by COVID-19.

The Business Continuity Package includes:

  • a targeted wage subsidy scheme for workers in the most adversely affected sectors.
  • training and re-deployment options for affected employees; and
  • working with banks on the potential for future working capital support for companies that face temporary credit constraints;

As part of the package:

  • The Treasury and IRD have been directed to develop tax policy options in line with the goal of reducing the impact for affected businesses, to support businesses to maintain operational continuity.
  • The Treasury and MSD have been directed to develop policy options to support households to maintain incomes and labour market attachment.

The detail of this package is now being worked through. It will be discussed again at the Cabinet COVID-19 committee on Wednesday, and the Government expects to be in a position to make further detailed announcements next week.

So a bit of dabbling so far.

“New Zealand is well-placed to respond to COVID-19. We have been running surpluses and our net debt position at 19.5% of GDP is well below what we inherited, and well below other countries,” Finance Minister Grant Robertson says.

But if world markets crash they will drag us down, and that could have a major impact.

Newshub: BNZ becomes first major New Zealand bank to predict a recession

BNZ is now using the much-dreaded R-word, saying it’s more than likely there’ll be a recession this year.

“Everyone sort of panics when they hear the word recession,” BNZ head of research Stephen Toplis said. “It’s like the whole world’s going to fall in.

That may be happening now.

CNBC: Oil nosedives as Saudi Arabia and Russia set off ‘scorched earth’ price war

Oil prices fell through the floor in early trading Monday, tanking as much as 30% after Saudi Arabia slashed its crude prices for buyers. The kingdom is reportedly preparing to open the taps in an apparent retaliation for Russia’s unwillingness to cut its own output.

  • Oil prices are down nearly 50% for the year after OPEC+ talks collapsed and Saudi Arabia announced slashed prices in an apparent price war with Russia.
  • With previously agreed OPEC+ production cuts expiring at the end of March, Saudi Arabia and Russia can theoretically pump as much crude as they want.
  • An oil price war will have massive geopolitical consequences, pummeling markets already shaken by the new coronavirus, COVID-19.

Reuters: Wall Street pounded by oil crash, virus fears

Wall Street’s main stock indexes plummeted about 5% on Monday, as a slump in oil prices and the rapid spread of the coronavirus amplified fears of a global recession on the anniversary of the U.S. stock market’s longest bull run.

The energy .SPNY index plunged 18.2% to its lowest level since August 2004 and crude prices were on track for their worst day in three decades as Saudi Arabia and Russia moved to significantly ramp up production after the collapse of a supply cut agreement. [O/R]

Companies listed on the S&P 500 have now lost more than $5 trillion in value in a sell-off sparked by fears that the coronavirus epidemic could tip the global economy into recession.

That report is out of date, Wall Street has got progressively worse through the day, with several trading haalts to try to pause the slide.

At 2:15 pm Monday in New York the Dow Jones is down 7.3% for the day.

The NZX already dropped 2.94% in Monday trading and will be affected by international markets today. All we can do is wait and see what happens.

And all the New Zealand Government can do is try to limit the damage here, but the may be chasing a bear.

 

Virus precipitates bad week on world sharemarkets

The Covid-19 coronavirus has spooked sharemarkets around the world, with the biggest drops seen since the Global Financial Crisis in 2008.

New Zealand’s NZX50 index dropped a further 1.54% on Friday. After hitting a peak of 12,073 last Friday it closed yesterday at 11,437 (having gone as low as 11,098), a drop over the week of 6.7%.

Stuff:  NZX drops 2% on open, stocks on a wild ride as coronavirus threatens economic damage

Stocks are on a wild ride as investors struggle to gauge the potential impact of the coronavirus outbreak on the global economy.

The NZX finished Friday trading down 1.54 per cent, joining overseas markets in reacting to the unfolding Covid-19 outbreak.

But world markets have slumped further as Friday worked it’s way around the world, with the Dow Jones 2.4% lower at midday on their Friday, following a 4% drop on Thursday.

BBC: UK top shares in worst week since financial crisis

London’s FTSE 100 share index has seen one of its worst weeks since the depths of the financial crisis in 2008 as markets continue to reel from the impact of the coronavirus.

Shares have shed almost 13% of their value, wiping £210bn from the value of companies on the index.

“The panic mode is full on,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

BBC – Coronavirus: Shares face worst week since global financial crisis

The main European markets also fell sharply on Friday, with London’s FTSE 100 index down more than 3%.

All the main European share indexes saw big falls on Friday, with Germany’s Dax index down 4.4% and France’s Cac 40 index falling 3.9%.

Earlier in Asia, Japan’s Nikkei 225 index fell 3.7%, bringing its fall for the week to more than 9%. China’s Shanghai Composite index also fell 3.7% on Friday.

Investors are worried the coronavirus impact could spark a global recession.

What is unknown is exactly how bad and how lasting the impact could be. But what is known is that this comes at an already tricky time for the global economy with Japan, Italy, China and the UK among those already seeing growth faltering.

Several key global market indexes – including the FTSE 100 and the Dow Jones – have fallen 10% from recent highs. A drop of that magnitude is generally referred to as a correction.

These drops are likely to further impact on the NZX on Monday.

Stock market graph

Reuters: Dow drops 1,000 points as pandemic fears heighten

The Dow Jones Industrials slumped more than 1,000 points in intraday trading for the third time this week on Friday, as the rapidly spreading coronavirus outbreak raised fears of global recession.

Over the week, virus fears have wiped nearly $3 trillion off the combined market value of S&P 500 companies, putting the three main indexes on track their worst week since the 2008 global financial crisis.

The benchmark S&P 500 fell about 12% from its record closing high hit last week, confirming its fastest correction in history on Thursday.

While the magnitude of the economic damage from the containment measures, which have crippled supply chains and hit business investment, remained unclear, analysts have sharply downgraded their outlook for growth and corporate earnings.

Adding to worries, the Commerce Department’s data on Friday showed U.S. consumer spending rose less than expected in January, a loss of momentum that could be exacerbated by the virus outbreak.

Here in New Zealand there has been a significant impact on tourism, tertiary education at the start of the academic year, and restaurants and fast food have reported a halving of business.

As Covid-19 spreads around the world the health of markets is under threat.

Donald Trump in campaign mode blames his political oppnents,

“I think the financial markets are very upset when they look at the Democrat candidates standing on that stage making fools out of themselves.”

“She’s trying to create a panic and there’s no reason to panic because we have done so good.”

And reassures everyone:

“I’m leading everybody, we’re doing great.”

“The — John’s Hopkins I guess is a highly respected great place. They did a — a — a study, comprehensive. The countries best and worst prepared for an epidemic. And the United States is now — we’re rated number one.”

– from The 31 wildest lines from Donald Trump’s self-congratulatory coronavirus press conference

“It’s going to disappear, one day it’s like a miracle, it will disappear. You know it could get worse before it gets better, it will maybe go away, we’ll see what happens, nobody really knows.”

Of course there are past tweets.

2012:

Image

2015:

Image

Obviously Trump is not to blame for the coronavirus, but he has helped US finances into a potentially precarious position that is overdue for a correction at least.

LA Times (via Stuff): President Donald Trump claimed credit for rising US stock prices, now he owns their fall

Some economists said Trump owns this drop – along with the unwelcome return of market volatility and a possible looming recession – not because of what he has said, but from what he has done.

The Republican tax cuts that Trump championed and took effect on January 1 injected a large fiscal stimulus into the US economy. And they appear to be having the intended effect. At their policymaking meeting in late January, Federal Reserve officials cited the tax cuts as one reason they were upgrading their growth expectations for 2018.

But critics say the cuts come at the worst possible time, when a near-record-long expansion has the nation at full employment.

Then this month Trump signed a two-year budget bill that adds even more stimulus by boosting spending roughly US$400 billion more than had been planned.

A downturn already is overdue. Since World War II, the US has averaged a recession roughly every five years. The current nine-year economic expansion is the second-longest in the nation’s history and by midsummer would be the longest.

The tax cuts, focused on corporations and the wealthy, will raise the already large federal budget deficit by nearly US$1.5 trillion over the next decade, according to Congress’ nonpartisan Joint Committee on Taxation.

Trump administration officials acknowledge that the deficit will jump in the short term. But they said that’s worth it to boost economic growth from the sluggish 2 per cent level that has marked the recovery from the 2007-09 recession and to further strengthen the US military, where much of the additional funding will go.

Fed policymakers also are to blame for the recent market volatility because they let stock prices rise to inflated levels without being more aggressive about interest rate increases last year, said Desmond Lachman, a resident fellow at the conservative-leaning American Enterprise Institute think tank.

That, combined with the additional fiscal stimulus coming from tax cuts and federal spending, led him to lament at a forum this month that “for the sake of one miserable percentage point of GDP we’re prepared to risk the whole economy”.

The virus has already precipitated a market ‘correction. We just have to hope that a sneeze doesn’t become a major malaise.

Many of us will be directly affected by this, in the short term at least. A lot of Kiwisaver funds will be taking a hit. And there is nothing we can do about it apart from perhaps moving our funds to safer schemes.

Share markets down, coronavirus blamed

The New Zealand S&P/NZX50 sharemarket index dropped 1.79% yesterday, with the business impact of the coronavirus (Covid-19) blamed.The S&P/NZX10 index dropped 2.37%.

The drop looks likely to continue today as the US stock market has dropped by nearly 1000 points in early Monday trading (US time).

RNZ: New Zealand stock market has worst day in four months amid coronavirus concerns

The New Zealand stock market has had its worse day in four months, amid fears the impact of the Covid-19 virus is widening.

The market was led lower by Air New Zealand, which fell nearly 6 percent, after warning its earnings may be hit as much as $75 million by the virus.

The spread of the virus outside China has darkened the outlook for world growth with infections and deaths rising in South Korea, Italy and the Middle East.

Australia’s benchmark index is also down about 2.25 percent, and Asian markets are softer.

Business Insider: Dow plummets almost 1,000 points as spreading coronavirus fears rattle traders

  • US stocks were swept up in a global sell-off on Monday as investors grappled with spreading coronavirus fears.
  • The Dow Jones industrial average plummeted as much as 997 points – or 3.4% – in early trading on Monday. The S&P 500 slid 2.5%.
  • Meanwhile, the Cboe Volatility Index – or VIX, widely known as the stock market’s fear gauge – spiked 40% to levels not seen since August.
  • The flight out of risk assets and into safe havens sent the US 30-year Treasury yield to a record low, and gold is trading at the most expensive levels all year.

The markets could bounce back, but it’s also possible this could burst the market bubble that was overdue for a correction at least.

Better Tuesday

Writing columns during significant share market upheaval has it’s risks, Tracey Watkins at Stuff yesterday (posted at 13:16):

Is New Zealand immune from the Chinese contagion?

OPINION: Here we go again.

As world share markets slide into a fresh crisis, John Key was quick to reassure on Tuesday that New Zealand has plenty of tools in the tool kit to head off a recession.

Interest rate cuts, bringing forward infrastructure spending, even tax cuts are weapons at the disposal of the Government and Reserve Bank to stimulate the economy. But with memories still raw from the Global Financial Crisis, the biggest threat facing the economy may be one the Government finds harder to head off – a loss of confidence.

Apart from China confidence appears to have recovered by the end of the day with tghe NZX recovering slightly and the Australian stock markey bouncing back by 2%.

Also at Stuff (posted at 18:20):

NZX bounces back after ‘Black Monday’ hangover

“Black Monday” is being followed by “Better Tuesday”.

The Kiwi share market shook off a hangover from “Black Monday” to closer higher on Tuesday amid signs of hope for global markets overnight.

The NZX 50 fell more than 2 per cent within seconds of trading opening on Tuesday.

But stocks staged a recovery which strengthened after the Australian share market showed resilience.

And The Dow Jones looks like in recovery mode too (about an hour until close on the US Tuesday):

DowJones150825-3days

And the five year trend shows more of a correction than a crash.

DowJones150825-5yr

For now at least.

China down again, other markets positive

The Shanghai Composite market in China closed down 7.63% which takes it to an 8 month low.

So far other markets are looking positive.

New Zealand’s NZX is up slightly by 0.11%.

Australia’s ASX had dropped further them us yesterdat but was up 2.6%

And European markets have opened over 1% higher.

Stock market plunge

World stock markets are all significantly down in Monday trading. New Zealand can do little but try and keep the fundamentals here sound. There’s nothing we can do about the world markets. The Shanghai market was down 8.4% yesterday.

NZ Herald: Wall St tumbles as China syndrome rocks world markets

The Dow was down 282 points, or 1.7 percent, to 16,176 points as of 1:54 p.m. Eastern time. The S&P 500 dropped 39 points, or 2 percent, to 1,931. The Nasdaq composite fell 72 points, or 1.5 percent, to 4,663 points. The three indexes are down for the year.

The New Zealand sharemarket was a sea of red ink yesterday as stocks were sold down in response to weakness in the global markets and investors worldwide became increasingly nervous about China’s economic prospects.

By the close of trading, the S&P NZX 50 was down 143 points, or 2.49 per cent, to 5616, with $2.25 billion shaved off the market’s total value. It was the worst day on local markets in four years.

Australia’s All Ordinaries Index fared even worse, slumping 3.66 per cent. In China, the Shanghai Composite Index was down 8.4 per cent at 3211 late yesterday.

A big blip or a slide?

From New York Times: Why Global Financial Markets Are So Turbulent

Last week, global financial markets were churning, but it really only mattered if you were an oil trader, Chinese bureaucrat or hedge fund manager.

Now it’s starting to get scary for everyone.

An 8.5 percent drop in the Shanghai Composite index in Monday’s trading session spread to financial markets across the world. In the United States, the broad Standard & Poor’s 500 index was down 2.5 percent in Monday morning trading, after steeper declines in Asian and European stock markets, falling prices for oil and other commodities, and a rush of money into the safety of United States Treasury bonds.

It started in China:

The immediate trigger to the outburst of global volatility was China, where the sharp drop in stocks Monday continued a rout that has been underway — with periodic pauses thanks to government interventions — all summer.

The Chinese economy is slowing, and the 38 percent drop in the Shanghai Composite Index since June 12 is indeed a huge number. There is no question that this giant economy is struggling with a transition from the investment-and-export-led boom of the last generation toward something more sustainable.

But a few facts make China’s problems less satisfying as an explanation for the turmoil across world markets. The Chinese stock market has risen sharply over the past year as millions of middle-class Chinese citizens took to making investments. Even after its steep drop this summer, the Shanghai index is down less than 1 percent for the year and still up 43 percent from one year ago.

Other markets followed:

Some of the key evidence for the “this is about more than China” story come from other emerging markets, stretching from Malaysia to Mexico, that are also taking it on the chin. Their currencies and stock and bond prices have fallen sharply over the last week. Some of that most likely reflects exposure to the Chinese economy. But some of it reflects something bigger.

In effect, the Fed’s easy money policies led global investors to search for higher-yielding securities, which they found in many faster-growing emerging markets. Money gushed into these countries in search of better returns from 2010 until 2013, driving up prices of assets.

But as the end of the era of cheap dollars has approached, that hot money has pulled out — and created volatile spikes in interest rates and damage to those emerging economies.

And oil.

The price of a barrel of oil fell from around $60 in late June to under $40 on Monday. Over time, that will be good news for American and European energy consumers, but there are complex feedback loops that probably make the commodity sell-off both a cause and a result of the broader emerging markets panic.

Waiting for the Fed.

In the background of all of this is a crucial decision looming for the United States Federal Reserve. Fed officials have expressed confidence that the domestic economy is on track and that the time is right to raise interest rates after nearly seven years of keeping them near zero. It could make that move at its policy meeting Sept. 16 and 17.

Fed officials have indicated a determination to base interest rates on what is most appropriate given the state of the American economy and not to overreact to fluctuations in markets. The latest volatility will test that resolve.

Of course, it is the Fed’s job to set policy based on where the economy is going, not where it has been. If markets keep falling, that could endanger American growth prospects. On the other hand, the Fed’s job isn’t to try to protect investors from the risks of a downturn.

Where too from here?

The Dow Jones is currently down 4.19% (US Monday).

UPDATE: After a down and up day the Dow Jones closed significant;y higher tha it’s opening lows but still finished down 3.58%

Labour/Green economics – denial or ignorance?

David Farrar points out A bizarre argument made by Danyl at Dim Post – Chart of the day, dead Wood edition, which graphs the share market since the Labour-Green power policy announcements. Farrar comments:

I’m amazed Danyl is trying to argue that as the overall sharemarket is up, then the destruction of value in some companies doesn’t matter.

Yes the NZX is up.That is because global investors are buying shares in Xero like it is the next Google.  It isn’t much use however to the person who only has shares in Contact Energy.

To use an analogy, it is like someone going into your street and burning your house down, but then telling you not to complain about it because the value of the rest of the street has risen.

Contact, Trustpower and Infratil shares are still lower since their drop after the power announcement. They haven’t “burnt down”, but a valid point is made.

There seems to be a wave of denial or ignorance of how sharemarkets work sweeping over the blogs on the left.

Anthony Robins at The Standard also did the graph trick – Economic apocalypse – not – he first called that post “No value has been destroyed”.

And similar from Scott Yorke at Imperator Fish (including a graph): Business elites denounce threat to their profits.

By way of example, the NZ Power announcement spooked the capital markets and led to a massive destruction of shareholder value, which in turn resulted in a loss in the value of many Kiwisaver funds. This potential disaster was only averted when the sharemarket continued to go up and up, resulting in an increase in the value of those same Kiwisaver funds.

Sometimes it’s hard to know when Scott is doing satire, or who he is satirising. At least he admits the aim of sabotaging power company assets:

I’m failing to see the problem. These companies have been doing nicely out of a business model that has resulted in too many people paying too much for their power. Of course their value was going to go down.

It doesn’t seem to have eroded confidence in the capital markets, though, eh?

Market confidence a Labour and Green government are looking less likely after attempt at market intervention, eh?.

Business elites making a lot of money out of an existing electricity model that few people actually understand but which appears to have failed, have slammed the plan. Critics have included the CEO of Mighty River Power, whose salary exceeds a million dollars a year, and stockbrokers who stand to profit handsomely from an uninterrupted partial float of the energy SOEs.

Critics of NZ Power will no doubt be hoping that its flaws will be evident to those cleaners on minimum wage, or solo mums on benefits, struggling to find the money to pay their power bill, and who might have otherwise be tempted to vote for either Labour or the Greens.

The profit bogey man and “poor people” sympathy appeal. This is remarkably similar to Metiria Turei’s latest column in D Scene:

We know that families are really struggling with increasing power prices. At the same time power companies are making even greater profits.

Stripping out excessive profits from the electricity sector is a smart Green solution.

The sharebrokers that are going to get a cut out of selling off our power companies are upset. Returning the excessive profits to New Zealand families will hurt the fat commission they are eying up.

Both Labour and Green camps seem convinced they are socialist saviours. In denial of market and business realities. And probably political.

Scott questioned me when I said “And Labour, which was already struggling with financial credibility”.

If you keep saying that enough, do you think people will believe it?

Some in Labour must surely believe it – John Armstrong in his Saturday column:

“This is part of National’s strategy to make next year’s election a referendum on which party can best be trusted with the management of the economy – a matter of some issue where both parties’ private polling has Labour far behind National”.

I would be as confident betting on financial credibility being the deciding factor in next year’s election as I would betting on a very uneasy sharemarket and plummeting business confidence if a Green Labour finance team take over in the next government.

It’s hard to know whether Labour and Green politicians and supporters are in political denial, or if they are ignorant of how business confidence and sharemarkets work in the real world. Possibly both.