Here's my summary of the key news overnight in 90 seconds at 9 am, including news it was all about central banks today as the Bank of Japan deployed its full arsenal while the ECB held its fire.
Expectations were high that the Japanese central bank would announce a major shift in monetary policy, and it duly delivered.
The bank unveiled a series of ‘unconventional’ easing measures aimed at re-inflating their economy. They included the expected 2% inflation target over the next two years; a commitment to open-ended QE; and a scrapping of the bank note rule (the value of Japanese government bonds will now be allowed to exceed the amounts of notes and coins in circulation).
The ECB today said it is ready to cut interest rates if the euro economy deteriorates further, and officials are considering additional measures to boost growth as their debt crisis there enters its fourth year. It also says EU regulators need the power to force losses on bank investors and it wants those rules in place no later than 2015.
It said this as Germany's economy slowed to "near stagnation" last month, while France's recorded its biggest contraction for four years. It is hard to be confident that the Europeans know what they are doing.
In the US, jobless claims hit a four month high.
And China has sent an interesting signal. At its prestigious annual Asian conference, it has ranked John Key higher than Julia Gillard, New Zealand higher than Australia. These sort of things are important to the Chinese. The Aussies noticed too. We are definitely on the Chinese radar these days, and batting way above our weight.
The World Economic Forum has also ranked NZ highly as a tourism destination - and #2 in friendliness, or as they say, "Attitude of population toward foreign visitors". Australia noticed that too.
Gold extended its losses for a third day, nearing a bear market after 12 years of gains. It lost as much as 1% to $1,542 an ounce, down another $10 on the day although it has bounced back a bit in afternoon trade. It has slumped more than 18% from its record close of $US1,900.20 in September 2011, nearing the 20% shift that typically defines a bear market.
The Kiwi dollar starts today basically unchanged from yesterday at 84.0 USc, 80.7 AUc. But the big change it to the Japanese yen which fell more than 3% overnight and helped propel our TWI to 77.3 and and a new record high.
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13 Comments
Finally,,,the straw that broke my......73% rise in director fees....and no doubt massive salary rise for the bosses to come..and perks....no way will I buy MRP shares....and the link to Wheeler and the ocr ?....the ocr stays low to keep the divs from MRP looking good and that means an easier pathway for the govt to harvest the loot....what happens when the ocr is forced up...and the economy tightens up...and power demand drops away along with the divs?
And what happens when the electorate of fools finally forgets about Clark's failure and votes in a socialist mash of mush..they will drive the divs lower to buy votes and so the MRP share price will collapse!
John Key is sending a big contingency of delgates to China in the hope of more trade. This is all very fine but we need to first understand Chinese intentions. Western business that moved to China 15 years ago found doing business in China much easier than today. Western business operating in China are now disadvantaged against any Chinese equivalent companies with red tape and extra costs to make them less competitive to Chinese businesses. The Chinese will be looking to copy your ideas , use your technology and then apply to their own way of doing things. In the short term the Chinese will be most accepting for New Zealand dairy products, but longer term they will want to control and manufacture under Chinese ownership. I would prefer if NZ focused on other South East Asian Countries and work with better tie to Latin America than being taken for a ride with the Chinese.
"I would prefer if NZ focused on other South East Asian Countries and work with better tie to Latin America than being taken for a ride with the Chinese."
I would prefer if NZ focused on NZ. We have everything we need to provide for our local/national community from resources within our local/national community. We don't need to follow the rest of the world like lemmings off a cliff or rats following the pied piper.
Batting above our weight...David...? more like kneeling with tongue distended,
A bit of balance please, our softknob policies on PRC investment into N.Z. is why the Chinese afford us the rank .
It's a pat on the head for us and a smack in the face for Gillard......maybe we should offer to send a Battalion to Nth Korea and warn those Yankies not to get any smart ass ideas about ruining our investment programme.
up the order
Bill makes no secret..
"As a small country, we rely on foreign direct investment to help us achieve economies of scale and for access to the rapidly rising middle class in China," English said, urging New Zealand dairy firms to establish distribution and sale channels in Asia with local partners.
http://www.scmp.com/business/commodities/article/1195552/new-zealand-da…
We agree that he is relying of direct foreign investment, however there are possibly other more pressing reasons...
Interesting on Gold, I would think the risk of loss from bank failures with ample examples like cyprus leading the way on haircuts. So if the risk of loss is higher so the interest in gold should be higher as protection. Maybe ppl are finally no longer seeing inflation and are exiting as their speculation isnt making them anything for uh free.....
fasinating....interesting times indeed to live in.
regards
You would think so Steven...but there you go, Gold is no less a confidence game than any other......suffering from a glut mmmmmnope, for many the burns don't heal despite the market chatter and indicators.
Those metals your sitting on will have to be a long put, just like any number of investments I have....captured money Steven......only a spread allows you to operate o the swings while the roundabouts are in service.
Obviously I feel justified in telling a lot of posters here over the last two years to give the shiny a big sideways, turns out , good call.
As to where the money will go in the E.U. by 2015 to avoid being stolen, I'm expecting a resurgence in property and buisness investment....profitable or not, I'd guess it's better than being robbed.
"justified" well maybe....it isnt over til the fat lady sings as they say.
I shook my head at the gold bugs and I'll do the same again if ppl rush into property and business investment. I mean i you invest $1million in a business and you get $100k back a year, not too bad. If you invest say $4million and still only get back $100k? is that still a good deal? I wouldnt say so. Then consider that $100k return is based on business as normal and make no allowance for peak oil and an economic depression, therefore that $100k income could easily drop 50% to $50k an annum for a business you paid $4million for....in effect huge wealth / capital destruction IMHO.
Robbed, yes I think its probable many will be. I think the best pick may end up having an asset that takes the least loss....and that for the ppl used to making money just with possession of an asset is a huge mindset to overcome, too large I suspect.
regards
2) certainly Factboy....
1) arguabley in that the P.I. addage that it's worth what someone is prepared to pay , or it's speculative component can range from 0 to X%.
3) yep, that's the big heavy isn't it ;would need to observe Japans Gold trends to draw reasoned conclusions.
So to 4)....fear....fear...fear.., lets say thoise who adopted a position in Feb 2011 and were expecting gold to climb to from between 2K and 5K by Dec 2012, and trust me there were no shortage of them on this site alone......well I think you know what transpired from that, some went deeper in belief, some became trapped, some bailed on a loss position, but eventually all will reside in a fear position after the frustration and anger subsided. Those that took no part could claim justification in the outcomes ,but it was always fear or caution of experience or otherwise that was the underlying motive.
It would takea punt of Buffett proportions to install the confidence it requires to find legs at the moment.
3) When in zero bound trap the risk is always deflation. Many gold bugs however are of the austrian camp and dont accept that Keynesian view/model. Hence their stance that printing and QE always causes inflation, hence the rush to buying gold, hence the chances were high on forming a bubble and being burned. It may indeed be shown that gold was a crazy bubble that was self-fulling, sit back and watch.
Funny thing is the classic use of gold is to protect your wealth through an event, so exiting now out of the bubble and re-buying lower at its fair price might be the best idea......how complex things are.
2) Possible, I dont think so myself.
regards
The thing I see in this Steven is that you have been solidly anti gold over the last few years (Yes and the Count has advised caution). But given you have shifted to an on the fence, questioning sort of position, that is actually a buy signal :-)
But if Krugman ever starts talking gold then you know it is time to sell.
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