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Daily briefing for Tuesday, January 11, 2011

Posted in News

Here is a quick snapshot of some key overnight news, views, and data.

December car sales strong
We are still buying new and used-import cars at a fast clip. 2010 new car sales were up +14% over calendar 2009, although the 2010 totals of 62,000 were way below the 2005 totals of 78,000. We imported 88,600 used imports in 2010, +28% more than the previous year.

Vulnerable exposures
Banking Day is reporting that Australian banks may be downgraded by S&P because of persistently high rates of credit growth relative to GDP and seemingly high property prices. These aspects will be now important to S&P as it adopts revisions to its credit analysis. Although it gives low-risk assessments to many parts of the New Zealand banking system, it judges our economic imbalances as 'high risk' because of persistently high current account deficits, and high external debt to current account receipts.

The Bill Daley problem
Daley is President Obama's new chief of staff. He has been at the very top of one of the US largest financial insitutions - JPMorgan-Chase. Some say he represents the capture of the White House by Wall Street.

Banks and debt 
"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
Thomas Jefferson

more below ...

     8 am       ---   52 week  --  
    Today   yesterday   high low  
     --------    --------   --------- ---------   
FX rates NZ$1=US$ 0.7627   0.7610   0.7964 0.6584  
  NZ$1=AU$ 0.7674   0.7641   0.8212 0.7408  
                 
Gold in US$ 1,372   1,367   1,421 1,058  
  in NZ$ 1,799   1,796   1,877 1,507  
                 
Copper in US$ 9,373   9,399   9,754 6,091  
  in NZ$ 12,289   12,351   12,811 8,951  
                 
Crude oil in US$/bl 89.24   88.44   91.45 70.15  
  in NZ$ 117.00   116.22   121.36 101.30  
                 
US Treasuries 30 yr bond 4.48%   4.48%   4.78% 3.61%  
                 
Dow DJIA 30 11,635   11,675   11,729 9,614  
                 

Goldman's Facebook pitch
You need to be seriously wealthy to get the Goldman Sachs invitation to buy into Facebook. But the Wall Street Journal couldn't help but notice some similarities between the Goldman invitation, and a Nigerian scam. You be the judge.

On the edge
Vietnam is growing fast, but its not all good. It is buffeted by rampant food price inflation, official corruption, and stifled by huge inefficient state-owned enterprises. It's in a real quagmire.

Some of its own medicine
French intelligence services are looking into China’s possible role in an industrial espionage scandal at car maker Renault that a senior minister has said involved 'economic warfare'. But France itself has a major industrial spying program.

"a worrisome new phase"
Many in Europe say a breakup of the eurozone would be nearly impossible. But a German bank doesn't think it is at all far-fetched, as real contagion spreads from the PIIGS to Belgium and France. It's looking ugly.

New stress tests
Large US financial groups are bracing for a new battery of stress tests that will determine which institutions are now healthy enough to raise dividends and buy back shares.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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11 Comments

Cunliffe gives National a

Cunliffe gives National a 4/10 for its handling of the economy.

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10698919

This is what Labour would do:

Labour favours trying to "basically grow our way out", with the Government taking a more active or even "activist" approach to economic development, particularly in the export sector.

 

"It's got to be a judicious combination of Crown investment in growth promoting activity, sufficient short-term stimulus to rebuild confidence in the economy, but enough discipline over Government finances to avoid a blowout of debt over the longer term."

He is a waste of space Alex.

He is a waste of space Alex.

David Cunliffe : "  But it's

David Cunliffe : "  But it's as inevitable  as God made green apples that when New Zealanders' understand what is being done to them they will not put up with it . "

Wrong on 3 counts , Cunny . Herr Helen ruled that NZ has no state religion , so God doesn't exist , because your lot said he/she/it doesn't .

NZ'rs voted your Labour back into office twice , in 2002 , and in 2005 . So they will put up with a whole pile of crap , before tossing it out .

God didn't make little green apples ...... Granny Smith did .

................ Try boiling eggs for a living , guy . I reckon that  you've got more talent for that .

High risk,if only those

High risk,if only those traders knew the half of it.Oh,but wait Jonkys told them.ae.

Someone should produce

Someone should produce cunliffe eggtimers...at least then he would be of some use....and could be biffed at walls...or tossed to the dog.

Breakfast would be kind of

Breakfast would be kind of slow , at the Labour party , wouldn't it . ........... A series of committees and votes , to reach a consensus on what we're having ( everyone gets the exact same amount of the exact same meal ) ............... Then a food standards inspection of the raw ingrediants ...... the eggs to be boiled . Then an assessment as to the sustainability of the energy source , the carbon foot-print , of boiling the eggs . Next some psycho-babblers roll in , to determine whether or not the eggs are in a fit state of mind to agree to being boiled ................

........ Feck ! ............ I'm off to Robbies for a feed .

"I sincerely believe that

"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
Thomas Jefferson

Just goes to show that the road we face ahead is nothing new.

The only US president that never wanted the job. A great man, but then I am biased because he was an architect.

If not eggtimers then maybe

If not eggtimers then maybe 'Cunliffe Russian Dolls'....every one a smaller promise!

Jefferson's commment reminds

Jefferson's commment reminds me of the Greek philospher who was condemning the youth of the day, don't listen, show no respect etc etc thousands of years ago. Some comments are ageless.

............ and the state of

............ and the state of Greece is what , today ? .............. some observations have more than a grain of truth in them !

Yes, was in Greece last May

Yes, was in Greece last May and those younger Greeks were demonstrating and rioting, the little sods