Intro
Hello. I'm Bernard Hickey with the daily briefing from interest.co.nz...
Today, we'll look at the latest signs of stress in a housing market where the bubble is bursting,
We'll look at the latest news from the global credit crunch and what it might mean here for interest rates and our exchange rates,

And finally we'll preview the next big batch of mortgage rate resets and how it will coincide quite nicely with the election.
Story 1,
Firstly we look at some signs emerging of real stress in the housing market.
Essentially the bubble is bursting and we're at that exact stage where the bubble pops, covering everyone in soap.
The Sunday Star Times has reported that all 21 house auctions it watched in the last week failed to sell the house, either at auction or after auction. It seems some of the auctions even failed to raise a bid.
Real estate agents report that auction failure rates have more than doubled to 70% in the last year.
It's clear the market is in deep trouble when you look at the pointy end of the process -- mortgagee sales.
We've just started an index measuring mortgagee sales listed on trademe.co.nz and realestate.co.nz. This week we saw a big increase to 212 properties listed from 154 properties listed last week.
However this should be taken with a grain of salt. Barfoot and Thompson, which is the biggest real estate agency group, have just started listing their properties with trademe. So their mortgagee sales were included for the first time.
But it is clear there's a rising trend of mortgagee sales.
Story 2
Now let's have a quick look at the latest news on the credit crunch coming through from America.
New Zealanders are starting to work out this really matters now that some of the banks are putting up fixed mortgage rates because of higher wholesale mortgage rates, which are directly linked to the turmoil on global credit markets since the sub-prime credit crisis hit the markets midway through last year.
Late on Friday UBS predicted that the big banks may have to book losses of US$600 billion because of exposures to toxic bonds that aren't paying their way. And then we saw more news that the housing market in America is in dire straights.
There are now more than half a million new houses that are sitting there empty. More than 300,000 of those are empty because people pulled out of initial deals to buy the house.
This latest batch of bad news had real impact on financial markets late on Friday. Stock markets fell more than 3% and the nerves hit those currencies seen as slightly riskier because they depend on the carry trade, where investors borrow in one cheap currency and invest in another currency with higher interest rates.
That meant the New Zealand dollar fell sharply this morning to below 80 cents. This is likely to mean higher interest rates too as nervous global investors demand more for the money they lend us to finance our current account deficit.
Story 3
And finally we look ahead over the rest of the year to an impending rash of mortgage rate resets.
You might remember back in the spring of 2004 the BNZ launched its unbeatable campaign for 2 year fixed mortgages that sparked a price war and a heavy bout of lending. This gave the housing market a second wind.
Those mortgages were reset for the first time in the spring of 2006 and now they're due to be reset again in the spring of 2008.
We estimate over $40 billion of mortgages or more than 300,000 mortgages will be reset and their mortgage rates will rise from 7.99% to around 9.7%. For someone with a 250,000 dollar mortgage it means their weekly payments will rise by around $60.
This will all happen around the time of the election later this year and will no doubt sharpen political minds on the effects of their policies on interest rates.
In particular the effects of big tax cuts, which the Reserve Bank governor Alan Bollard has warned would increase inflation and may force him to put up interest rates.

I'm Bernard Hickey from interest.co.nz with the Daily Briefing. Catch you on Tuesday.