Here's my summary of the key news overnight in 90 seconds at 9 am, including news US stocks were down 2% in late trade as investors focused on the risk the world's largest economy could go over a 'Fiscal Cliff' at the end of the year that could push America back into recession.
Unless a deadlocked Congress can come up with a new deal, the US goverment will automatically slash spending and increase taxes to the tune of US$607 billion or around 4% of GDP.
The re-election of President Barack Obama hasn't changed that equation and may even have deepened the risk. The Republicans have entrenched their control of the House of Representatives, while the Democrats have strengthened their hold on the Senate. See more here at Reuters.
Obama is expected to present a new deal to cut the fiscal deficit by US$100 billion to break the logjam, but investors are sceptical.
US stocks fell around 2% and US 10 year Treasury bond yields slumped from 1.75% to 1.62%. See more here at Blomberg.
Meanwhile attention is also swivelling to Europe where the Greek Parliament is expected to vote on yet another austerity package to try to stay in the Euro.
MPs are expected to vote in favour of the 13.8 billion euro plan, but the margin is tight and there were violent clashes around the Parliament and the country is shut down by a 2 day general strike. See more here at Reuters.
Closer to home, investors will be watching New Zealand labour force figures closely, where unemployment is expected to fall slightly from 6.8%.
4 Comments
This and the embedded links make for interesting reading. Much must be at stake.
Indeed, the resources and political power that Republicans mobilized in an effort to deny millions of Americans their right to vote, and to suppress voter turnout, raise serious questions about their legitimacy as a political party. A legitimate political party does not rely on preventing citizens from voting, in order to prevail at the polls, any more than a legitimate government relies on repressing freedom of speech or assembly in order to remain in power. Read article
The crux of the problem for the Republicans ,Stephen H, is in the need for reformations of the party nucleus away from the reliance of "angry white men" and toward an acceptance of minorities, an understanding , if you like , that without real reform in that area it will be they who are marginalised at the polls while the more conservative among them become disillusioned and disenfranchised.
I would hazzard a guess Chris Christie now holds more conservative views. and will go on to cause some upheavel within the ranks.
The Big watch................is Hillary going to run...? well look at the rite of passage..
We can see straight after the US elections that there has to be some negotiations about the looming fiscall cliff which I suspect will be pushed further down the road and some agreement will be done. It will be interesting to see what Israel response will be to the US elections and what their next step will be over Iran. We can expect a fiscal drag on the US economy in 2013 with bumps from Europe where the people of Greece will make the final decision and not the politicians who dont understandthat they are making the mistakes this time round. Based on the events going forward in the not so distant future we can expect the kiwi to drop from the turbulent cocktail overseas.
Fiscal cliff? Fooey! Don't worry be happy as Jimmy said.
We are all rich. Or at least have reason to be optimistic and happy. We live in a land where according to the CIA factbook we have 3608 acres of arable land per person and 15 people per sqr km. It may not seem like that in Auckland - but you can move. We have oodles of marine and land resources and we can feed and water everyone now and many more besides. Kiwi society is generous and open with a majority of folk willing to help one another from spare tyre to spare room. Some bad hats but not many. There are factions wanting a slice of their cake but many bakers creating more without too much thought of personal gain. For four million plus people someone sometime did a great job with railways, electricity, roads, clean water and hey even democratic government. So be happy and thankful. Enjoy the native fauna but embrace the useful that many cultures have introduced, cows, grapes, sheep, wheat, pizza, chow mein and butter chicken and of course tourists who come to marvel at what we have. Look at doom and gloom here and elsewhere with a sideways glance and enjoy your privileged life.
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