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- English defends current account blowout 59
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- 90 seconds at 9 am 51
- Budget 2012 reactions 42
- Thursday's Top 10 with NZ Mint 38
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90 seconds at 9am: Key sees OCR on hold; Capmark bankrupt
Click here to see today's video.
Bernard Hickey details the key news in 90 seconds at 9am in association with ASB, including news that Prime Minister John Key has commented on monetary policy on the fringes of an East Asian summit meeting over the weekend.
Key said he didn't expect the RBNZ to hike interest rates until mid 2010 "at the earliest" while the New Zealand dollar remained strong. The RBNZ is due to make its rates decision later this week and is widely expected to drop its comment about holding the OCR until the latter part of 2010. What does he know that we don't? John Key's comments conflict with the idea of the Reserve Bank being independent.
Meanwhile, large US commercial property lender Capmark has filed for bankruptcy and Citigroup has cancelled thousands of fuel credit cards. It has also increased interest rates for many to 29% from 19% while the US OCR is at 0.25%.
3 Comments
Well Bollard will need to
Well Bollard will need to keep up with the RBA if he hopes to keep any pretence of actually having influence over New Zealand monetary policy. Who would invest in New Zealand for lower return than they can get in Ozzie? See also my blog http://www.greenbranz.org
Just off the MEA press...
Just off the MEA press...
'Down before up for the OCR'
An Official Cash Rate cut will take the pressure off our tradeable economy say the New Zealand Manufacturers and Exporters Association (NZMEA). An export led recovery is not possible unless this happens. The NZMEA supports Federated Farmers' call for a 50 basis point cut; such a cut is three months overdue.
NZMEA Chief Executive John Walley says, "The Government has been at pains to point out that the tradeable economy has been in recession for five years. The real economy will only continue to deteriorate while the dollar remains at these elevated levels. Our last survey showed a 43 percent decline in export sales in August compared with a year ago suggesting that the tradeable economy is still not close to any sort of recovery."
"We have seen the effects that recent low sales volumes and persistent low margins have had on Bridgestone, and other firms are indicating that they are also close to the edge."
"Preferential trade deal efforts are wasted if the currency undermines export competitiveness."
"Headline Cost Price Inflation (CPI) was 1.7 percent for the year to September which leaves the Reserve Bank with some room to move. Immediate relief is necessary to prevent more job losses."
The latest figures show that tradeable CPI has declined 0.1 percent over the past year while non-tradeable inflation has grown by 3 percent. This continues the trend of persistent inflation in the non-tradeable sector.
"The Government needs to tackle the structural problems presented by our fiscal and monetary policy settings," says Mr. Walley. "Government spending, taxation biases and inflation management are behind this disconnect between the non-tradeable and tradeable economies."
"It is unacceptable to just shrug off the currency problem. The problems for exporters are an inevitable consequence of our policy settings, and these must be changed if we are to see a balanced economy."
News just out over cnbc,
News just out over cnbc, New York state is letting prisoners out early because the state is broke. What's the bet that bastard Madoff will be out early?...Ben and Timmy might arrange it and get Madoff to help run the giant US financial ponzi scheme for them.