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90 seconds at 9 am: US stocks close down after losing early gains; NZ$ down to 80.5 USc; German GDP better than forecast, but Italy, Spain contract sharply; StanChart settles for US$340 mln

Posted in News Updated
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Here's my summary of the key news overnight in 90 seconds at 9 am, including news the New Zealand dollar fell below support around 80.8 USc to settle around 80.5 USc in morning trade after a late selloff on US stock markets took appetites for riskier assets lower.

US stocks closed down around 0.2%, giving up earlier gains as technology stocks and financial stocks fell. Markets remain subdued during the Northern Hemisphere holidays, but are wary of the risks the much-hoped-for easing of monetary policy expected on both sides of the Atlantic in September may not materialise. See more here at Bloomberg.

Meanwhile, European stocks rose around 0.6% after slightly better than expected GDP growth figures for some parts of the Euro-zone economy.

German GDP grew 0.3% in the June quarter from the March quarter, which was better than the 0.2% growth expected.

French GDP was flat when economists had expected a small contraction. But Spanish and Italian GDP fell sharply and the overall Euro-zone area GDP contracted 0.2% in Q2 from Q1 and contracted 0.4% in Q2 from the same quarter a year ago. See more here at Bloomberg.

Meanwhile, Standard Chartered has settled allegations by New York's financial regulator that it covered up US$250 billion of Iranian money laundering by paying a settlement of US$340 million. See more here at Reuters.

(Updated to correct figure in headline for settlement to US$340 million from US$380 million)

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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8 Comments

I guess standard chartered

I guess standard chartered didn't have the right contacts in Government Sacs then...

More of a top ten link but

More of a top ten link but this seems mighty close to sabre rattling by George Friedman at strafor.com.

Interesting that a currency

Interesting that a currency trader is calling a top in the AUD.

Bobby calves and NAIT - I'm

Bobby calves and NAIT - I'm hearing that there aren't the buyers of bobby calves around this year due to NAIT.  The cost in terms of time and dollars in being NAIT compliant isn't worth it, especially for the smaller rearers, so they say. With a $5 NAIT tag price some dairy guys are finding it uneconomic to keep bobbies once cost of milk, labour, tags etc are taken in to account - even at $30 a bobby calf. So an increase in slinks??
 
Any comments from others out there as to what is happening in their areas?

Is the govt opening up more

Is the govt opening up more land based oil and gas exploration because it doesn't seem to attract the environmentalists outcry the same as offshore drilling does?  Also land based exploration and extraction can't be stopped on private land whereas offshore work usually brings in the claims from Maori.  With district councils now being given the the power in the decision making process, it conveniently removes govt from being held responsible with the voters.
Under the Crown Minerals Act the Government could allow exploration and extraction on private land without landowners permission, Dr Ilg said.
A change in Government policy means district councils are now playing a greater role in processing and awarding mining permits,’’ he said.
http://www.stuff.co.nz/southland-times/farming/7481421/Farmers-air-conce...
 

CO - no, it's not a result of

CO - no, it's not a result of such intelligence.
 
Growth requires exponential extraction - can't be sustained, but that's what it requires.
 
So at this point in the 'doubling' process, we get simultaneous needs for housing, roads, food, mining, fishing (Antarctic, aquaculture - the virgin paddock in simpleton minds) the need to commercialise the DoC estate, repress the RMA .
 
That just tells you how big the current doubling had to be, tells you that there won't be another, and the question of what environmentalists do or do no hit is a matter of their resources.
 
The sickest joke is Gareth Morgan - talking tonight about his conservation efforts in the Antipodes. The threat? Growth-based finance, as practiced by Gareth Morgan.
 
Cognitive dissonance in it's most starkly obvious form.

PDK Don't be so hard on

PDK
Don't be so hard on Gareth every journey to enlightenment requires more than one step. To his credit he has at least opened his eyes even if he is struggling to evaluate what he sees
 

Posted on Cantabrians Unite

Posted on Cantabrians Unite facebook this morning - http://www.facebook.com/CantabriansUnite

 
SCANT MASSAGED NUMBERS FROM COUNCILS PAUL ANDERSON IN THE PRESS TODAY....

Paul Gorman of The Press reporting...CHRISTCHURCH RATES TO REMAIN CHEAPER DESPITE REBUILD

http://www.stuff.co.nz/the-press/news/7478810/Chch-rates-to-remain-cheaper-despite-rebuild-council

The ratepayers of Christchurch deserve much more than a bunch of infantile massaged numbers from the Councils Corporate Services Manager Paul Anderson.

What is required are comprehensive costings, feasibility studies ans robust economic and social impact reports.

Leaked information to the National Business Review (refer earlier postings on the CU facebook) suggests the initial cost estimates could be in the order of $1.6 billion (refer earlier postings Cantabrians Unite facebook), but even these initial estimates will likely prove way too low.

There is an enormous amount of land involved to be purchased - and still, we have not been informed of the full extent of this.

This just does not involve land of course - but buildings, leases, subleases and business disruption costs. In addition to all this are the land holding costs until it is fully redeveloped and generating income.

There will too be considerable land removed from the Rating base as well.

Prior to the earthquakes, these land values had been in the central area as much as $3,000 plus per square metre (where the suggested loss making Convention Centre is proposed to go), down through to something in the order of $500 - $800 per square metre down in the south east quadrant of the four avenues (where the loss making Stadium is suggested to go).

To make matters worse (and more costly for ratepayers) the Authorities have made it clear they intend to keep land values high. Indeed - going out of their way to starve land supply with grossly excessive green areas through 8 blocks between Manchester and Madras Sts. For reasons not explained, this green space will retain its underlying commercial zoning.

There is a saying in the development industry - "If you get the land price wrong - everything else is wrong."

The tourism / visitor industry is a low revenue and low wage paying sector, that requires low land prices to make developments viable. The Convention Centre market, both nationally and internationally, is extremely competitive. The associated hotel sector needs to have the capacity to provide "rock bottom" room rates to compete.

The writer understands, for example, Elton John didn't pay a dime for the use of the Dunedin Stadium. He flew straight in and out following the gig back to Sydney - not even staying the night!

Compounding these problems will be the office rental rates required for new developments in the Central Area. In discussions with industry professionals, the writer understands these will need to be in the order of $450 per square metre - with Operating Expenses (rates, insurances etc etc) in the order of $100 per square metre. Therefore the Total Occupancy Costs will need to be about $550 - $600 per square metre.

These suggested office rentals are way above what a low wage City can stand, where the gross annual median household incomes are in the order of $56,000 - in contrast to Auckland at $72,000 ( refer Demographia Survey Schedules http://www.demographia.com/ ).

Back April CBRE / Lincoln University released research indicating that from last August through April, the office tenant intent to return to the Central Area had fallen from about 41% to 31%.

Once these remaoning prospective Central office tenants research the issue, these numbers will drop substantially further - particularly when they realize new suburban rentals will be 60% of the suggested new Central Area rentals or lower.

The Central Area retail will be pretty much only as good as the office market supporting it. Retail will need to rely on a lot more than the seasonal tourism / visitor market to survive.

So what the Authorities have done with this hairbrained Blueprint, is told the world that they are doing all they can to make the Central Area uncompetitive.

Put bluntly - if it isn't economic - it isn't going to happen.

Instead - what they should have done from the outset, was ask themselves - how can we get the required loss making public facilities in place at the lowest costs to ratepayers (in both the central area - and suburbs where most people live and work) and allow the Central Area to recover as quickly as possible?

Former Timaru Council Town Clerk and current Central Area Demolition / Recovery Manager Warwick Issacs (with no development experience as such) could certainly not be accused of being "quick' on the Central Area demolition.

But thats not how illinformed bureaucrats with no real development experience think. The equally inninformed politicians "parroting" this Central Blueprint nonsense have pretty much just gone along for the ride.

It is therefore of critical importance the required research as outlined above is completed as quickly as possible - so that those paying (i.e. the long suffering ratepayers and taxpayers) are fully informed of the COMPREHENSIVE TRUE COSTS, so the appropriate decisions can be made.

The current Blueprint will not get out of the starting blocks - as it is so divorced from economic and development realities.

Hugh Pavletich