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90 seconds at 9 am with BNZ: Big Govt Christchurch announcement due; Fed cuts growth forecasts; Kiwi dollar record against pound

Posted in News
See video

Gareth Vaughan details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand including news that the Government will today outline options for homeowners with insurance in some of the Christchurch suburbs worst affected by the earthquakes there over the past 10 months.

The announcement, due at 1.30 this afternoon, is expected to offer home owners in some of the worst affected areas the opportunity to sell their houses at 2007 values and sign their insurance policies over to the Government. See more here at the NZ Herald. The idea is that this means the home owners can cash up and leave, with the Government to recoup the payout on the property from insurers.

The plan is expected to cost at least hundreds of millions of dollars and involve 5000 homes in six of the worst-hit suburbs being Bexley, Avondale, Horseshoe Lake, Burwood, Dallington and Avonside. See more here at Stuff.  Those in the Port Hills and Lyttelton are likely to have to wait for their homes to be assesed for damage from the June 13 aftershocks.

Meanwhile, the US Federal Reserve’s Open Market Committee has left its benchmark interest rate in a range of zero to 0.25%, a record low. Chairman Ben Bernanke repeated the pledge to keep interest rates at record lows for an extended period, which he suggested would be at least another two or three meetings. See more here at Bloomberg.

In its quarterly projections the Fed cut its growth projections both for this year and next year. It said the US economy should grow between 2.7% and 2.9% this year, down from a 3.1% to 3.3% projection in April. And it predicted 2012 growth in a 3.3% to 3.7% range, down from April’s prediction of 3.5% to 4.2%. See more here at Reuters.

The Fed blamed a recent slowdown in growth and quickening of inflation partly on "transitory factors", such as higher commodity prices and supply chain disruptions from Japan's devastating earthquake and tsunami in March. The Fed’s US$600 billion bond buying programme, or Quantitative Easing II, is due to end this month.

The New Zealand dollar’s recent strong run continued overnight, hitting 50.70 British pence. That’s its highest level against the pound since the New Zealand dollar was floated in 1985.

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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13 Comments

I haven't got anything to say

I haven't got anything to say yet, I just wanted to pip Wolly at the post.

But I am waiting for the

But I am waiting for the positive spin on how all those people cashing up and leaving is going to contribute to GDP.

Third ...puff ...puff..

Third ...puff ...puff..

CChurch householders are

CChurch householders are going to be offered the 2007 values on their houses - is that correct?

That is what Granny Herald &

That is what Granny Herald & TV3 are saying.

Erm in that case - is it just

Erm in that case - is it just me scratching my head as to why they are therefor being offered 'peak' prices? CChurch price pre-quake would have been about 5% below 2007 values would they not?

Ah well, I suppose National just need to sell off another SOE to make up the difference, no big deal.....

andyh - I can tell you that

andyh - I can tell you that ChCh house prices have fallen a lot more than 5% from their 2007 peak.  A friend of mine sold his house in Avonhead, a suburb on the west side of ChCh, in April 2011.  The GV was $580,000 and he sold it for $470,000.  FYI his house suffered no damage whatsoever and he had not made an insurance claim.

In ChCh the advertised prices and the actual prices paid are miles apart.  I have now left ChCh, because my house was severely damaged, and am looking forward to the generosity of the Gov't with taxpayers money.

Quite a few of those

Quite a few of those properties will be rentals...so the landlord stands to say "thankyou John"...and I don't see it as wrong to pay out the 07 valuations because what other valuations are there....

Should those who had no insurance be paid out?...hmmmmm

Will the  Port Hills and Lyttelton wreck owners receive the same treatment...one would hope so...

That leaves them what don't make the cut...up to their necks in shite and insurance arguments...and likely to get the rough end of the deal...

But on a different note...what if the bulk of the 5000 and the others to come...say stuff this let's move away....Ashburton..places north....Whitebaitland...it will be a jolt for the RE mob...drinks all round!

  A magnitude-6.7 earthquake

 

A magnitude-6.7 earthquake rattled northeast Japan on Thursday morning, the U.S. Geological Survey reported.

Japan's Kyodo news agency reported that the Japan Meteorological Agency issued a tsunami warning for Iwate Prefecture.

Found this account of Tony

Found this account of Tony Ryall defending electric privatisation:

 

Tony Ryall, Minister of State Owned Enterprises, turned up to the Finance and Expenditure Committee today to justify their plans to partially privatise the state owned energy companies.

With a little bit of creative licence, the exchange went something like this:

Tony: We need to partially privatise them so that Government can raise capital to spend in other areas and so that the energy companies can get access to more capital.

Russel: But the energy companies could just issue bonds to raise capital, you don’t have to privatise them.

Tony: Yes but selling shares is better than issuing bonds.

Russel: But you just forced Genesis Energy to buy Tekapo A&B power stations from Meridian with $821 million in borrowed money, and then Meridian used that money to pay Government a special dividend of $521 million. So effectively you made the power companies go further into debt making it harder for them to get the capital.

Tony: They might have done that but we didn’t make them.

Russel: But if you do sell them, none of the proceeds of the sale goes to the companies, it goes to the Government, so it doesn’t help them get access to more capital at all.

Tony: That’s right. But they can then issue more shares to raise capital.

Russel: But if they issue more shares then the Govt’s share will be diluted and will be less than 51%, and hence you will lose control of them.

Tony: [Pause] Um, well…. if that happens then the Government will buy some of the shares to ensure that we keep at least 51% ownership.

Russel: So to protect your 51% ownership you would need to buy 51% of new shares offered, so half the new capital raised will actually be provided by the Government?

Tony: Precisely.

Russel: What was the point of all this exercise again?

Tony: Life in Wonderland has its own point.

Brilliant .! ! ! ...thank you

Brilliant .! ! ! ...thank you Vanderlei....

FYI Broadband bill passes

FYI

Broadband bill passes third reading

A bill to deliver ultra-fast and rural broadband has passed its third and final reading in Parliament today.

Communications and Information Technology Minister Steven Joyce says the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill positions New Zealand to take advantage of communications technology that will truly transform this country.

“There has been a lot of talk for a long time in this country about support for innovation.  The passing of this Bill today is a very significant step that proves this government’s commitment to further develop New Zealand as an innovation-based economy.”

The Bill provides the regulatory framework for the Government’s ultra-fast broadband and rural broadband initiatives.  It also implements reforms to the Telecommunications Service Obligation (TSO) regime, and implements measures to assist in the roll-out of broadband. 

The Ultra-Fast Broadband Initiative will deliver fibre connectivity to schools, hospitals and 90 percent of businesses by 2015, and to three-quarters of all New Zealanders by 2020.

The Rural Broadband Initiative will cover areas outside of the UFB and will enable 97 percent of schools to connect to ultra-fast broadband and 97 percent of households to receive peak speeds of at least 5 Mbps.

The Bill implements a robust open access regime for new broadband infrastructure the Government is investing in.  It also clears the way for the structural separation of Telecom into two new businesses, as part of Telecom’s involvement in the Ultra-Fast Broadband project.

“The passing of this Bill today marks the end of the beginning of a new era of world-class broadband infrastructure for New Zealand, and the delivery of the Government’s broadband investment commitments,” says Mr Joyce.

“This infrastructure will revolutionise the way Kiwi firms do business, the way our kids learn, and the way our health providers deliver services to our communities.”

Following Royal Assent, the Bill is scheduled to come into force on 1 July 2011.

Nick Clegg(UK deputy

Nick Clegg(UK deputy PM) calls for public to get shares in bailed-out banks

"Previous sell-offs of shares in state utilities attempted by the Thatcher administration were derided as gimmicks or short-term tax giveaways since the mass of shares were either immediately sold on or resold to the big pension funds within two years"

Not that I'd expect the idea to be accepted...