Here's my summary of the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the New Zealand dollar surged to a five month high overnight of 83.5 USc and a record high of 63.2 Euro cents.
This follows a renewal of risk appetites on global markets overnight after stronger than expected factory output figures in America, Europe and China.
Growth currencies such as the New Zealand and Australian dollars often rise and fall along with appetites for risk and expectations for global growth, given commodity prices often move violently in one direction or the other depending on the global economic growth outlook. The Australian dollar rose to US$1.07. See more here BNZ's currencies report on our site.
China's official Purchasing Managers' Index (PMI), which is the most closely watched measure of factory activity, rose to 50.5 in January from 50.3 in December. See ,more here at Bloomberg. Anything over 50 is seen as expansion and expanding Chinese factory output is seen as good for the Australasian economies, given our reliance on exports to China. More than 60% of New Zealand's exports are now to Australia and Asia, while just 7% of New Zealand exports go to the Eurozone.
See more here from ABC on the Chinese factory figures and what they mean for Australia.
American and European factory output figures were also better than expected, which boosted US and European stock markets.See more here on American PMI figures here at Reuters.
US stocks are up 1% in late trade, while European stocks rose 2% overnight. See more here at Bloomberg.
However, the European crisis is far from over, although it has been quietened down by expectations the European Central Bank that it will lend another €1 trillion of three year loans to European banks.
The Greek crisis is worsening. Another crisis meeting of feuding Greek politicians has been called to agree on yet another more aggressive series of austerity measures to cut spending and increase taxes ahead of April elections. Most of the politicians have rejected the idea of more austerity, even though Greece's German donors are demanding it before they agree to a €130 billion bailout package. That deal must be agreed by the end of this week or Greece is likely to default on bond payments due on March 20. See more here at Reuters on the Greek standoff.
Meanwhile the political focus is tightening in America ahead of November Presidential elections as the likely candidates are narrowed down. Private equity investing millionaire Mitt Romney looks set to be the Republican candidate against Democratic President Barack Obama.
Obama announced plans overnight for US$5-10 billion worth of refinancing help for some of the 11 million home owners in America who are 'under water', where their mortgage is worth more than their home. See more here at Reuters.
Closer to home, the fortnightly auction overnight of milk powder on Fonterra's GlobalDairyTrade platform showed prices fell 0.9% for their third auction in the last four. But prices remain remarkably stable around where they have been since last July and are down just 23% from their March 2011 peak. They fell much faster and further when the global economy slumped in late 2008 and early 2009.
Dairy output is up 15% in much of the North Island and a near record payout of around NZ$7/kg is expected, which is boosting export returns and may boost some provincial economies if farmers choose to spend money rather than repay debt. See more here from BusinessDesk on our site.
22 Comments
This is a great read
>>>>>
When starting this blog, my aim was to inform as many people as possible of the dangers that were being hidden in the world economy, and in particular in the UK economy. My worry was that, somehow, we had lost sight of where real wealth creation came from, and had mistaken the accumulation of debt for wealth.
http://cynicuseconomicus.blogspot.co.nz/2010/08/goodbye-post.html#comme…
Hi Andrewj,
You might find this an interesting read on the UK economy then (although written several months ago):
http://www.tullettprebon.com/announcements/strategyinsights/notes/2010/SIN20110526.pdf
I guess that's another country that can kiss their AAA rating good-bye.
Good Chinese and US factory data....arrrrrrrrrhahaahaaaaaa
A few continue to fool so many!
Meanwhile.... "James F Cameron and his family intend to reside indefinitely in New Zealand and are acquiring the property to reside on and operate as a working farm,"stuff.co
.
He sees food production based on good land as a secure location for capital...wise man. Not so sure he has picked the most productive part of NZ.
makes then easier to sell :-)
are you saying that genesis energy are acting without integrity.
surely not.
Please do not hurt yourself with uncontrolled laughter at reading the following...falling off your seat might involve ACC....and that's no laughing matter...
FYI - the gap between rich and poor is growing without relent. Global justice is a prerequisite for sustainable development and we have to understand that our lifestyle is not sustainable."
President of the Swiss Confederation Micheline Calmy-Rey
http://www.batr.org/totalitariancollectivism/013011.html
FYI - California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter..........
Read more here: http://blogs.sacbee.com/capitolalertlatest/2012/01/controller-state-to-…
The "depression today" is worse/longer for some countries than the Great depression of th 1930s....
http://notthetreasuryview.blogspot.co.nz/2012/01/recessions-and-recover…
Interesting....
regards
Oh but steven the media say growth has never been better...that recovery is upon us...that we should be happy and spend...and believe the BS the govt is telling us...surely the NZ mainstream media wouldn't churn out total BS...endlessly...would they?
Who will buy the advertising if we are heading for a 20~30 year depression? and not a recovery......
regards
2012 - unprecedented domino effects accelerating.
Steven - my personal view – step by step: More sombre economic- social- political and environmental events will occur worldwide – high prices/ oil/ food/ taxes/ inequality/ unemployment – unrests - corrupt and greedy leadership will lose control – turmoil – false flag/ terror - making more devastating decisions – unprecedented domino effects accelerating - ruining the world.- leading into major war(s) - between 2012/ 14.
I'm prepared ;-)
http://www.youtube.com/watch?v=HLqZqNNOKTo
ohh - and a car to drive to the supermarket and my own petrol station of course.
Bernard – strong data - what kind of manufacturing ?:
http://www.economist.com/blogs/dailychart/2011/03/defence_budgets
Strong manufacturing data – of course - the general public - blinded by the media again ??
It’s the biggest fighter aircraft deal since the early 1990s,” said Boeing’s Mark Kronenberg, who runs the company’s Asia/Pacific business. India’s planned multi-billion dollar, 126+ plane jet fighter buy became a contest between Dassault, Saab, MiG, American competitors and EADS’ Eurofighter.
The Obama administration said it has reached a $30 billion agreement to sell advanced fighter aircraft to Saudi Arabia, part of a broader push by Washington to counter Iranian power.
http://online.wsj.com/article/SB10001424052970203899504577128674022827702.html
China's stealth fighter to become operational in three years http://www.rediff.com/news/report/chinas-stealth-fighter-to-become-operational-in-three-years/20110112.htm
FYI – click also on the links http://www.globalissues.org/print/article/75
It just tells the stupidity of human kind:
http://www.cbo.gov/ftpdocs/122xx/doc12264/06-30-11_FYDP.pdf
It all comes together nicely ! Please, read my comment 12:28pm above.
FYI – the latest about the relationship Israel/ USA - Iran http://www.haaretz.com/
Well a MiEv avoids the need for a petrol station....at 65k you save 100s'K on that petrol station which is just a large tank that wont get filled anyway.........what a saving!!!! just look at the ROI!!!!
;]
Prices is interesting.....look at what happened to oil prices in the last recession they collapsed from $147 to $35USD? of course if you dont have a job even petrol at $1.20 a litre is out of your capability....so consider things in a relative sense........
ditto Fonterra's payouts per kg......they dropped....farmers go bust this time....en-mass? ouch..........
Ppl in haiti were making mud cakes as they couldnt afford flour.....ie they simply fell off the food purchasing radar.....
Just listen to BE saying inflation is dead no need for monetary policy....we need growth...he's right of course the only Q is is he right for the right reasons, ie peak oil. He doesnt say why, just we need "growth", which there wont be, no energy......
oh and we need to get our resources out into the tradeable sector....sounds like he does get it.....(Peak oil) one last round of robbing the future (can kicking) curtiously of JK and BE....
Unemployment, yes it will rise, I cant see how not....trouble is I dont see how WINZ etc is going to be paid for......
Major wars, well all the ones in the past was about keeping, having or securing resourses...in the 1930s the USA was an oil exporter.....(I think it was a net exporter until the early 50s)....today to take more resources you need resources....teh US doesnt have it, not without eating its own children....
The more I read/watch/observe the more I think they do get the poo they/we are in.....
Just look at the graph.....
http://www.indexmundi.com/energy.aspx
regards
Used to think McGillicuddy were jokes with their Great Leap Backwards policy. Wrong - they were just well ahead of their time.
http://en.wikipedia.org/wiki/McGillicuddy_Serious_Party#Policies
"Ah yes Mr Bollard it's blah blah at Kiwibank here..the demand for our credit has taken a dive...what do we do?"
"Oh thanks...jeez I didn't know it was so easy...I'll announce the cuts right away"
And you lot rubbish Treasury over their half million dollar bloated salaries...look see they do do the odd bit of work...not much I grant you but every LITTLE bit counts.
"The Treasury has warned the Government it must start addressing the pressures of future superannuation costs and it makes a case for lifting the retirement age" herald
"The Earthquake Commission has proposed a series of sweeping changes to its business, including dropping contents cover and continually increasing its levy, as it awaits a review.
The commission's briefing to its incoming minister, released today, makes a series of recommendations for consideration in a forthcoming review prompted by the Canterbury earthquakes.
They are:
- Removing contents insurance cover.
- Introducing variable premiums, depending on house size or hazards risk.
- Automatic adjustment of premiums and payout caps.
- Increasing the excess on claims.
The EQC levy was increased threefold yesterday, jumping from $69 to $207 a year for the typical homeowner."
http://www.stuff.co.nz/the-press/news/6355421/EQC-to-cut-contents-cover-hikes-levy
Hmmmm....yes and does anyone else see a sharp increase in the number of families deciding to save the premium each year and give the insurance the big flick....I do.
Following on from the above...if your house is built of fireproof material...and the electrical is new...and the family don't smoke....and you don't have gas....and you are not on a fault line or in a gully or on a slope or cliff or flood plain or beach dune....and if you install a security system that videos the crims arriving and activates recordings and alarm companies who call the cops...Why would you fork out $1000 a year for insurance that left you holding the baby for the first many hundreds or thousands...why would you?
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