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The news stream
- Special housing legislation flawed 77
- 'Be brave & tackle home ownership tax status' 57
- Women tops in Auckland real estate 52
- 90 seconds at 9 am: American QE 49
- Wednesday's Top 10 with NZ Mint 49
- Auckland mayor lauds 'real options' 19
- Thursday's Top 10 with NZ Mint 15
- 90 seconds at 9 am: Trade tension 13
- Quake claimants win in court 8
- 90 seconds at 9 am: Reality checks 8
90 seconds at 9 am: UK downgraded; Italians voting - deadlock predicted; US manufacturing expands; Australia won't intervene on currency; floods costly; NZ$1 = US$0.837, TWI = 76.5
Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Moody's stripped the United Kingdom of its triple-A credit rating, and predicting economic weakness will weigh on its public finances for years to come. The pound fell to 55.2p to the NZ$1. S&P is likely to follow Moody's. The action is widely believed to stiffen the UK's resolve of the benefits of austerity, although it will reignite the debate there.
Italians are voting in one of the most closely watched elections in years, amid disquiet over a discredited elite adding to concern it may not produce a government strong enough to lead Italy out of an economic slump. Berlusconi may well re-emerge, as could a the obscenity shouting comedian Beppe Grillo who is widely expected to get a huge protest vote, one that may throw the result into confusion.
The media is picking the candidate of the left, Pier Luigi Bersani to emerge as the winner, but Mario Monti is in the race too, as is a gay trade unionist from the South, both of whom are expected to poll well in their consistencies, making a clear result very unlikely.
Italy could be in a mess, but it has been here before. The most prosperous times for Italy have been when there has been a dysfunctional government in Rome; the north especially prospered in the past in these circumstances. Whatever happens, Italy will be a problem for the EU and the euro.
In Australia, RBA governor Stevens has taken a line out of the Wheeler playbook by placing the bar high in currency intervention. He said he’d need to be confident the currency is 'seriously overvalued' before considering intervention to weaken it, and he isn't about to do that now.
The latest Queensland and NSW floods may add more than $1 billion to insurers claim costs.
The kiwi dollar starts the week a bit higher at 83.7 USc, 81.2 AUc, and the TWI is at 76.5 mainly because of the falling British pound.