Here's my summary of the key events overnight that affect New Zealand with news there is a new corporate scandal, this time in Japan.
But first, we should note that Winston Peters has changed his timeline on how long he is giving himself for coalition talks. He now says he won't promise to make the decision public on Thursday - that it could be Friday, the weekend, or even later before he announces his decision.
The IMF has raised its forecast for China's economic growth in 2017 and 2018, citing the stronger-than-expected performance in the first half of the year and reflects a slower rebalancing of activity toward services and consumption. In its latest World Economic Outlook, they say they expect the Chinese economy to grow +6.8% this year and +6.5% next year, both +0.1 percentage point higher than its previous forecast in July. Going the other way, it has reduced the US growth assumptions by -0.1% to +2.2% and +2.3% in 2017 and 2018. Australia and New Zealand don't get a special growth target mention in this global review. Overall world growth has been revised higher.
In the US, loan growth from banks to businesses is shrinking. Since November the growth of loans to companies has dropped from +8.1% to just +2.1%, according to Federal Reserve data.
In Japan, a key major steel company has admitted falsifying quality standard data for some copper and aluminium products. This scandal has set off shock waves among many of its very high-profile customers. It has been called a 'grave issue' by Toyota.
In Spain, the Catalan leader, who engineered regional elections that voted overwhelmingly for independence from Spain, has pulled back from the brink, calling for talks with Madrid before doing anything unilaterally.
In New York, the UST 10yr yield has opened slightly lower at 2.34%.
The price of crude oil is higher by more than +US$1 and now just under US$51 a barrel, while the Brent benchmark is just under US$57.
The price of gold is also up another +US$9 today, at US$1,291/oz.
And the Kiwi dollar has held its own overnight at 70.8 US¢. On the cross rates we are slightly lower at 90.9 AU¢, and just under 60 euro cents, which is its lowest against that currency since May 2016. Our TWI-5 index is now at 73.4.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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37 Comments
After years of struggle for autonomy; being beaten up by 'you'r own police and having endured to cast a vote, the Catalans are told it's all in vain?
Lucky I'm not in their throng, because I can tell you, I'd be part of the furious mob that would now burn the place to the ground....."There, Madrid. It's all yours ...or what's, left of it"
PS:
"However, he immediately asked the Catalan parliament to suspend the act of independence for some weeks to allow for a period of negotiation with the Spanish government.
By doing so Puigdemont may have not gone far enough for the most radical separatists.
The youth branch of the radical-left CUP, the junior partner of the Catalan pro-independence alliance, tweeted that they were witnessing “unacceptable treason.”
Exactly. It will be interesting to see how this now unfolds.
O/T but when oh when are the police going to be given the resource to improve the woeful standard of driving in this Country? Driving test needs to be stricter and generally the aggressive style of driving needs to be reduced. The amount of tailgating in this country is appalling. No wonder we are at the bottom of the OECD statistics.
a) I think the new Tesla's are already driverless capable. b) EV's are heading to price comparability by 2024 and maybe earlier. c) Uber has to use someoneelse right now, not needing a driver is its next game changer.
d) the ever increasing rate of change.
Given these I think its
No, the current Teslas are nowhere near driverless, they keep saying that the new Teslas have all the hardware necessary to be completely driverless, but there are plenty of people that think that is extremely optimistic. They have no LIDAR, just cameras and forward radar. I was going to buy a new Tesla Model 3 when they are released here but they just did not design them for a human driver,moved all the controls to a touchscreen .. so i'll stick to burning dead dinosaurs till somebody else makes a decent EV.
maybe you need to be more tech savy like this guy, i think for an normal person the tech would get in the way
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Read some of the Tesla forums... very limited self driving in good conditions only. Beware of "truck lust", roadworks, tar lines and all sort of random conditions where the car says "I can't do this, you take over". Its getting better slowly, but Full self driving where you can have a sleep and the car drives itself is a long way away.
There is the possibility of a paradigm shift from privately owned cars to driverless taxis. But then we would need millions of driverless taxis just to get everyone to work and back, the rest of the day they would be idle.
There is no way that everyone in NZ is going to fork out $30k or more for a driverless car in the next 20 years...
Imagine the computing power needed in a car which is overloaded (more underpowered than usual), trying to overtake a slow truck on a stretch of road with an overtaking lane in the opposite direction but with a white line on your side, so overtaking can be done when nobody is in the oncoming overtaking lane.....
Its easy when all cars are automated. All cars will know where other cars are, they will all know to avoid each other, they won't need lines on roads or traffic lights or roundabouts. But while human drivers are still around, it will be pretty complicated for them...
That wouldn't increase the computing power needed, the computing power is needed to detect and recognize and clissify objects from sensor data, its a fairly constant demand, probably worst in heavy traffic in the city where there is a lot of objects to identify and track. The car simply wouldn't try for the overtake in those conditions as the amount of clear road needed would probably exceeed the max sensor range.
Yep. and I think such a scenario is jumping the gun. One would expect first steps would be to ring fence major cities (Auckland) and their central areas/suburbs will be restricted to auto cars/ public transport only. Non intelligent vehicles restricted to outlying areas and through roads. Over time the net expands, pushing the auto only zones bigger and bigger. At the same time, unlocking all those central city car parks for other uses.
Yes there were. Admittedly not many and not for long. slow drivers was just as much a problem, but very few didn't pull over into the slow lane. The scariest though were the crazies weaving through the traffic, significantly over the speed limit (130). Four lane motorways mad cruising generally effortless and easy.
Oil Giants At Odds As Saudi, Russian Ties Improve
https://seekingalpha.com/article/4112762-oil-giants-odds-saudi-russian-…
Working-class Americans devoted a growing percentage of their income toward paying their debts last year, the first increase since 2010 and a shift that is likely contributing to rising default rates, Moody’s Investors Service said.
The families’ debt burdens are still relatively low compared with earnings-- less than they’ve been for most of the last three decades, according to Moody’s, which released a report Tuesday that analyzed the Federal Reserve’s triennial survey of consumer finances. But the borrowers are accumulating more debt even as the economy continues its recovery, which could create problems for lenders if U.S. growth slows, said Jody Shenn, a senior analyst at the bond grader. [My emphasis]
“We are seeing signs of the credit cycle turning,” Shenn said in an interview. It’s important to look out for signs of stress “and think about the implications when the economy does hit a rough patch.” Read more
Surely the perception of economic strength is in the eye of the beholder.
There are supposedly jobs that Americans won’t do, and now there are, apparently, jobs that British won’t do. In the latter case, according to the UK’s Minister of State and Commonwealth, Sir Alan Duncan, it is the Europeans who were blamed for taking work from native English. The result was, in his view, Brexit. Duncan called it a “tantrum” last week.
You could feel in the last 10 days of the campaign, traditional blue-collar urban Labour opinion going viral for leave. They were stirred up by an image of immigration, which made them angry and throw a bit of a tantrum. That was part of the chemistry that explains the result.
There is very little sympathy for the plight of workers pretty much anywhere, but especially in the US and Europe. Economists have convinced the so-called elite political class that each economy is working and therefore it is the workers within them who are themselves the cause of growing, deepening disaffection. Read more
You see it here, too, at a lower level. People trying to convince those who are getting the short end of the stick that things are going fantastically and they just need to suck it up. Of course...those doing the convincing received much more from the country in the past.
Yes, as many of us have argued here is that the current economic models that Governments work to just do not work. This includes the global free market that was foisted on us all by the Americans. The problem is how to change it? There are many pundits the world over, including here who say we can't. I for one don't believe that, we just have to start. Try regulating against greed for a start.
Steve Keen telling the UK Greens how money works. https://www.youtube.com/watch?v=5Ivv6K5BI1o
Interesting comments on limits to growth in the middle.
Perhaps the most startling new piece of information in there is reference to a paper by the FED chair (presumably Eccles) in 1943/4 that the primary purpose of tax is not to finance government, but to moderate government spending by taking money out of circulation. Tax is not necessary was the claim. Tax favours those that can avoid it, or the wealthy, thus increasing inequity. This is around the 55 minute mark.
Keen puts a big knife in the side of borrowing for housing, saying housing is really consumption. He says they have tracked mortgage growth as the cause of the financial crisis, new lending essentially inflating house prices. 90% of new credit growth is against housing, which is not productive.
Interesting claim that services do nothing for an economy, it all comes down to manufacturing.
The only time Britain has solved its debt problems was inadvertently. WWII. I take it you picked up that Britain consumes 5x the food it can produce off its own land?
I never feel productive sitting down to watch an hour of video, but this is one where Keen shows the dance he has to engage in between contemporary economics and what is sustainable. You can shorten the second half by fast forwarding through the questions you can't hear anyway, and just listen to his answers. It is a very worthwhile watch.
And a thanks to Iain Parker for the link via facebook.
"x5" Japan was concerned back when Russia had the wheat problem and Thailand etc restricted rice exports. At that point despite Japan's wealth it couldnt buy food, Japan of course could only produce 30% (ish) so got most concerned. Japan also I think highly subsidises Japanese farmers?
(29mins in)
"Interesting claim that services do nothing for an economy, it all comes down to manufacturing."
is the same problem as x5.
In the post 1970s Britain moved from manufacturing that took huge energy inputs to services which took little by comparison. They did this because energy and waste disposal (polution etc) had got too expensive, a pre-cursor to peak oil.
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