Here's my Top 10 links from around the Internet at 6 pm in association with NZ Mint.
I welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream. See all previous Top 10s here.
My must watch today is #9. Ya gotta laugh.
1. Firewall full of holes - That's the Economist's conclusion about the European firewall set up to stop the Greek problem spreading to the rest of Southern Europe.
This celebratory mood sweeping Europe in the wake of the European Central Bank's two money dumps is premature.
The basic problems haven't been fixed.
The austerity packages are now ravaging Southern Europe.
All it will take is another bad election result and another failure to meet targets for the markets to get the nervous nellies again.
Here's The Economist, muttering darkly:
To get properly on top of its debt problem, Europe needs to be bolder. A growing chorus argues that this must entail some form of joint liability for countries’ debts. A proposal from the German Council of Economic Experts for a European Debt Redemption Fund, which would mutualise all euro-zone members’ debts above 60% of GDP, with strict rules to pay them off over 25 years, is gaining traction in some quarters.
Germany itself remains staunchly opposed to anything that smells of Eurobonds, and the current period of calm has only reinforced that resistance. Meanwhile, the clock ticks.
2. A compelling story - NPR has an amazing story on the engineers who vented the hydrogen built up from the meltdown of the Fukishima nuclear reactor.
By the time Reactor 3 exploded three days after the tsunami, there were only 250 people remaining onsite.
Had these workers not stayed, says Edge, it's hard to predict what would have happened. There was talk in Tokyo of evacuating everyone within 125 to 190 miles of the plant, which included the capital. That would have ground Japan to a halt, he says. And one worst-case scenario involved not only a meltdown of the reactors, but a melt-through, where the nuclear rods could have melted through their containment vessels and into the ground.
"Essentially then, they are in the water table and the radioactive contamination is much worse than it turned out to be," says Edge. "It's called China syndrome, on the basis that if such a thing were to happen in the States, you could have nuclear fuel melting all the way through to China. That would never happen — but it's the worst nightmare of someone who works at a nuclear power plant."
3. China's reform push - The leadership transition in China later this year will be crucial. The Economist looks here at whether reformers will get their way.
Few analysts expect Chinese leaders suddenly to start adopting the reforms that the central bank, World Bank and the DRC suggest. But in recent weeks there have been signs that reformers are trying to influence the policy choices facing the incoming leadership.
Several articles have appeared in the Chinese press noting the 20th anniversary of a tour of southern China in January and February 1992 by Deng Xiaoping. Deng used that trip to attack hardliners and press for faster market reforms. These articles have urged a bolder approach. Some have suggested the need for a “second southern tour”.
4. A bigger share of the economy - James Kwak writes at baselinescenario about how the profit share of the US economy taken by financial institutions is due largely to increased trading of stocks, bonds and derivatives...
The main reason why finance’s share of GDP has outstripped its production of intermediation services, according to Philippon, is a huge increase in trading volumes in recent years. Trading, of course, generates fees for financial institutions, with limited marginal social benefits. Yes, we need some trading to have price discovery.
But if I sell you a share of Apple on top of the other 33 million shares that were traded today, is that really helping determine what the price of Apple should be? The more that financial institutions can convince us to trade securities, the larger their share of the economy, whether or not that activity improves financial intermediation.
5. Grumpiness grows - Another reason the problems in Europe may be far from over is that some of the Germans within the European Central Bank are increasingly grumpy, Reuters reports.
There may not be much more easy, cheap money thrown into the abyss.
Some European Central Bank policymakers are alarmed that a dramatic loosening of lending policy stemming from a 1-trillion-euro (835 billion pound) wave of cash unleashed into the financial system will fuel imbalances in the euro zone and stoke inflationary pressures.
Led by Bundesbank chief Jens Weidmann, who was previously a top advisor to German Chancellor Angela Merkel, they are pushing for the central bank to think about an exit strategy after it fed banks 530 billion euros on Wednesday in the second of two cheap, ultra-long funding operations.
The signs of internal division add weight to what sources have already told Reuters: that the central bank does not intend to offer any more cheap three-year cash. The chances of interest rates dropping below their record low one percent also appear to be diminishing.
6. Boom, boom, boom, boom - Rodney Dickens writes at SRA that New Zealand faces the prospect of a North Sea style boom or shock if it finds oil offshore.
When and how big will future oil and gas finds be in NZ? Answer: I have no way of telling but the potential of large finds and the risk it could result in a significantly higher NZD should be taken seriously. This issue should continue to be monitored by any firms that are impacted significantly by the NZD, including exporters and importers.
7. American dairy lobby tactics - America's dairy lobby dropped their opposition to lettting in more Fonterra imports via the Trans Pacific Partnership this week.
But there's a catch, as Radio NZ reports.
The US Dairy Export Council has dropped its long-standing objection to the dairy industry being included in the nine-country TransPacific Partnership free trade talks.
But it says any concessions on tariffs should only be in exchange for steps by New Zealand to water down Fonterra's export dominance.
8. 'Pick me' - Jeffrey Sachs has launched his bid to become the next President of the World Bank in a Washington Post op-ed. Good on him.
9. Totally Stephen Colbert on the new class warfare in America and the trickle down economy.
The Colbert Report
Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive
10. Totally Clarke and Dawe - Jeremiah was a bullfrog speaks on the history of circuses. And Rudd vs Gillard.
49 Comments
re6 - SRA seems to be one person, with a conventional banking-type background.
I wonder if he is capable of seeing over the top of the curve?
Beyond peak, who pays the 'billions'? Where's the underwrite for the payment? If things remain stable socio-politically world-wide, we may well get paid for the stuff. That's a less than 50% chance.
Meantime Brownlee is happily spending our money on behalf of faceless corporates. Come and rape me. I'll even pay you. That's theft, Gerry. Time someone had you on about it. Of course, in the normal way, you'd expect it to be Labour, but of course, Hughy Watt was Labour, wasn't he. Seems they haven't moved on.
It's absolutely outrageous that the Anglican Church is allowed to tear down Christchurch Cathedral.
Officials are in absolute lala land allowing this and many other demolitions.
Christchurch is now utterly wrecked. Cashel Mall restart is pretty much dead (apart from Ballantynes and the two cafes). No building of any real significance is underway anywhere. No decent preservation or conservation of heritage effort is underway anywhere (except on buildings that are largely intact).
It's all a disgrace. Investement won't come if there is nothing to come too. I'm ready to pack up and leave, not at all because of quakes, but because of the absolute incompetence of officials, overwhelming stupidity and complete nonsense from idiots who are doing nothing productive apart from destroying a city.
With Christchurch buggered, NZ will fail too.
All the scumbag inept politicians and other leaders need booted out asap.
It is a disgrace that the CBD remains in a cordon over 12months after the quake and they continue to close buildings without real reason, while in the same breathe CCC approves buildings of the same construction methods to be built!!
It's all a bloody circus run by fools.
We may as well live in a bloody dictatorship.
Key's total lack of interest and total uselessness means he is by far NZ's WORST prime minister, allowing this all to happen on his watch.
After September, there was a total lack of logic in allowing extremely dangerous buildings to be used as is. After February there were totally arbitary decisions allowing damaged buildings in some areas to be used while others which were barely scratched were shut down. Now we have this hard line where buildings with neglible damage are shut down while other dangerous ones are still in use around Canterbury.
All insanity. Best not to watch the news (as Dilbert's Wally suggested in yesterday's cartoon!)
Elley, I didn't say the damage on Christchurch Cathedral was neglible, it has considerable damage but it is far from irrepairable.
Brick and stone masonry buildings can easily have the walls deconstructed as necessary. They are much easier to deal with than large reinforced concrete buildings.
The entire roof structure is timber and entirely safe, so the option is to remove the roof off the nave as the walls are badly damaged and reconstruct the walls as necessary. The east end is less damaged and could be repaired in situ.
Base isolation could be added, as well as the building being underpinned as necessary. Repairs would not need to be absolutely like for like as the masonry at height could be replace with veneers etc. A very large proportion of the lower masonry could be retained with original stone, all timber could be retained, all the glass etc, having a steel structure supporting the roof and reinforcing the walls (potentially not entirely hidden to show the building is safe) could easily bring it to well over a 100% of code.
It all just needs careful thought and planning.
We have 2 buildings that CERA sent us section 38's on, we easily made those buildings safe, and replacing the masonry walls with timber framing that made it safe was literally a 3 day job (although still a lot of work to repair fully).
There is just a condition of stupidity infecting Christchurch.
Elley, I have to say that talk of a city being people rather than buildings is just namby pamby nonsense.
Officials have just instilled fear in people in order to make it easier to push unpopular decisions through.
Many of the "structural engineers" were completely unqualified to make calls on buildings such as the PGC and CTV. They did nothing more than "walk throughs" and in the case of CTV according to the Royal Commission Hearings never reviewed it after Boxing Day.
If the masonry is constrained, brick or stone structures can be entirely safe. Any building can be fixed. Partial deconstruction and rebuilding is a relatively easy and straight process. The problem is that the Anglican Hierachy have no interest in rebuilding. They crunched Holy Trinity, St Lukes and St Johns. St Mary's was ruthlessly crunched destroying hundreds of thousands of dollars of salvagable materials. St Mary's had relatively little damage with the main problem being the tower which was separating from the rest of the building.
However the tower was actually a later addition - which explains why it was leaning.
I redrafted the original 1920s drawings for St Mary's when I did an internship at Warren and Mahoney many years ago. Those original plans did not include the tower.
Despite the protests of the local congregation the building was crunched (virtually no salvage). Looking at the plans it's clear that there were ways to easily strengthen the building as the walls were not high and there was a large amount of timber. The constuction of concrete with a limestone veneer to the inside and a stone veneer to the outside made the building relatively strong and certainly in large part easily rescued.
Insanity and stupidity has overtaken Christchurch.
OK, well, the debate is a bit moot I suppose seeing that the decision has already been made, but let's assume that it was restored to the standards you outline - I take it then that if you were standing in or beside the restored cathedral during a similar earthquake to what we have had, you would not feel the sligthtest twinge of panic or urge to run for your life and would remain standing where you were, cool as a cucumber and safe in your knowledge that the experts were better than the CTV and PGC ones (or the EQC & insurance ones for that matter, who can't seem to agree on anything). If so, then you're the kind of person I'd like to be around during a major catastrophe! If not, then I must conclude that your whole argument about how the building could be made safe is rather hypocritical.
As for the "namby pamby nonsense", I am afraid that I can't see how a monument being taken away, be it Chch's cathedral, Paris' Eiffel Tower or New York's Statue of Liberty, could equate to the death warrant of a city, however significant or symbolic the said building was. Surely those cities are not defined by and limited to one or even a number of buildings/structures, and their loss, however tragic would not mean that the city would lose all its appeal and raison d'être? If anything, geographical location probably has more impact on a city thriving. So we might have to agree to disagree on that one...
Elley, your view is unrealistic.
CTV and PGC were never fully assessed by anyone qualified to do so. The engineer who assessed PGC was a former classmate of mine, and his performance in his assessment was about par for what I'd have expected from him (sorry but it's sort of true Mark).
There are buildings far more dangerous throughout NZ which people are unwittingly in right now. The Cathedral is essentially one large space, if the walls are constrained and the roof entirely supported then the building would be safer than being in the average tilt slab or concrete block building that is currently under construction in ChCh.
I would happily stay in it in an earthquake, but during any large quake you should always take cover as objects may fly around (such as objects on shelves or walls) so yes ducking for cover below the height of the pews would make sense.
Obviously most of the tall walls would need entirely deconstructed and rebuilt, but in doing so the cathedral could be absolutely entirely safe. It's an absolute fantasy to say it can't be done.
The arrogance of people from overseas like yourself and the Bishop to say it must come down when that is certainly no fact, and when it is an such an important symbol of a place is simply an outrage to the generations of NZers who built this place to what it is today.
Under no circumstances would a civilised Britain allow St Paul's not to rise again if it wa destroyed. Under no circumstances would the US leave the Statue of Liberty to be demolished. The Italians and definitely no Romans would allow St Peter's to be crunched or the remains of the Forum or Colusseum to be cleared simply because it was too hard.
The New Zealand I grew up in never found anything too hard. New Zealanders could do anything, if the namby pambys don't share the enthusiasm then leave it to people who want to make the city great again. The wreckers can go home.
"Obviously most of the tall walls would need entirely deconstructed and rebuilt, but in doing so the cathedral could be absolutely entirely safe. It's an absolute fantasy to say it can't be done."
He's right Elley.....if someone put up the billion dollars I am sure the stones could be locked into a steel and reinforced concrete structure that would be like the Beehive and stand up to an 8.0 quake...
All it takes is a BILLION DOLLARS....CJ is happy to fork out all he has to prove it can be done.
Rubbish it wouldn't cost a billion dollars. It could be funded via private donations even if it took 10yrs+. They are spending $4 million on cardboard cathedral as inteirm measure anyway so its not like the restoration would be super urgent.
The penny pinching angle particularly annoys me on this one. Lets consider:
$20 million for temporary rugby stadium.
$2 million for temporary tupperware waka.
$10 million for the cloud and shitty old shed restoration
But woe if the icon of Chch is damaged, we won't even attempt to listen to overseas specialists engineers in heritage restorations.
Even 3rd world Haiti is restoring the presidential palace so heavily damaged in Port-au-Prince. Doesn't say much for NZ really does it.
Wolly/Robby, the cost of restoration is probably much less than imagined. Estimates of $100m are in my view excessive. Much of the most expensive parts of the building to replace are entirely fine. Reassembling and rebuilding could be done relatively economically.
If they actually listened to world earthquake engineering experts lik Prof Kit Miyamoto who has repaired historic buildings damaged in major quakes in many countries or looked at the example of the San Francisco Capital building then they would realise fixing the Cathedral is a relative breeze.
Idiots in a rush to get nowhere seem in charge. Failure is assured without a fundamental change.
OK Chris. Just to clarify, I did not say anywhere in my comments that it should be destroyed - in fact, I stated that if only one building could have been saved it should have been that one. I simply questioned whether or not it could truly be made safe - and by the way I am not important enough to have had any say in the decision that was made (or arrogant enough to think I should have for that matter).
Oh and I'll be sticking around, sorry. Unlike many "real" NZers who bugger off to Australia or elsewhere for better salaries and all. Considering that we pay a heck of a lot of taxes and don't get a cent back from subsidies or anything despite having 5 kids, and probably still wouldn't if our income halved, we're not the worst immigrants you could have mind you.
Chris, I am sure officials can be blamed for a lot of things but I doubt instilling fear in people is one of them. The events of the last 18 months have done that. We got together with friends who live in New Brighton at the week-end. In the December earthquake, a large and heavy chest of drawers rolled over in their baby's room (thankfully missed the baby) and other furniture fell over. They said it was very violent there. They don't need officials to scare them - like many others they already are and you can hardly blame them for feeling that way.
There are lots of issues re-Chch rebuild but it may be best to focus on Chch people first. These friends bought a section next to us but are stuck in limbo and have been for over a year now. They can't sell their house until EQC actually deals with their claim but it is still going nowhere after all that time (and needless to say, a heck of a lot of stress and frustration). So they can't start building their new place and even if they could, they have now found out that since the December earthquake nobody they have talked to will insure a new build in Canterbury. If this applies to houses that require a full rebuild, there might be more to worry about for Canterbury than the fate of its buildings (like making sure that not everyone gives up and decides to leave the region).
Elley, there is no insurance realistically for new residential builds available in ChCh, but many companies will allow existing customers insurance in other parts of Canterbury.
Most of the commercial rebuilds underway have insurance directly in the Lloyds market with very high excesses.
Your friends problems sound far less bad than many people I know and indeed less bad than many of my individual claims. A lot of people (thousands) have uninhabitable houses which EQC are refusing to progress until land decisions are made, this is despite the homes being in many cases clearly irreparable. Private insurers are refusing to progress until EQC makes a decision - so many are left on a road going nowhere with rental loss or alternative accomodation entitlements now run out.
Your friends and anyone who has not already made their home "quake safe" will unfortunately receive little sympathy if something were to happen. All tall furniture should be secured to walls, heavy objects located near ground level, pictures hanging only on strings (with the hook bent over the string), delicate items on open shelves with blutak on the base and even cuboard doors with child proof latches or EQ resistant latches if required. And of course cylinders secured.
If you are concerned about people leaving, the best way to avoid that is giving a sense that rebuilding is underway not demolition, unfortunately CERA doesn't know how to do this and Key and Brownlee don't care.
This is actually for a new build in the Waimak district and it seems that at least the Waimak and Selwyn are all in the same boat here.
They are not complaining and themselves say they are very lucky that their house is still livable unlike many others. They are however disheartened, stressed, and not looking forward to spending a 2nd winter in a house that has cracks everywhere with 3 very young children. They are also over EQC assessors trying to get them to accept that the cracks are "historical". As a result, they are considering putting the section on the market and leaving the area altogether. I can only imagine that people in worse situations are probably tempted to follow suit.
Fully agree with your comments on CERA, Key and Brownlee.
Sounds to me like the Anglican Church has a full replacement type insurance policy and there'll be a windfall in terms of it being assessed as not repairable. The Church cannot be in a great financial position and I'm sure they have already got other expenditure in mind for the excess created by the windfall.
Religion is a business too!
Aha...you hit the spire on the pointy top there Kate....Take the money and run I say...maybe slap up a timber shed and bung a cross on it and hang a bell inside...what more do they need...there are so few members left....churches being flogged off all over the country...
Yup you are correct. Refusing international offers of help re:the Cathedral I might add. What is the rush to get it down, it's fenced off and nobody can get near it because the rest of the CBD buildings have to come down anyway
May as well rename Christchurch - Hamilton 2.0 or perhaps Tilt-slab city the way things are going.
Silly thing is it's become all about insurance money, yet I'm sure Chch Cathedral could fund a restoration with private donations.
There seemed to be $20 million of public funds available for a temporary rugby stadium and $2 million for a tupperware waka, but when it comes to real heritage ...
Exactly. And look what we have lost that are now carparks or wasteland.
- The original public library on Cambridge Tce. The building was single level and only lightly damaged AND over 20m from any road boundary or neighbouring building (the 2 storey part on the corner was badly damaged and did need the facades deconstructed, but certainly not crunched).
- St John's was 10m from any boundary and only about 3m high with the gable ends and tower down.
The list goes on and on
When will the stupidity end?
Many people, including myself, believe that the sooner the Cathedral goes, the better. Stop thinking that your opinion is fact and that everyone else is incompetent. Now don't get me wrong - I'm not saying the whole destruction/rebuilding phase has been handled well, but Christchurch is not buggered like you suggest, and nor is New Zealand.
You also don't need to keep reminding us that your ready to pack up and leave. Just go already.
Many people, including myself, believe that the sooner the Cathedral goes, the better.
Why? Just curious - as I wonder if to some it's the most painful of reminder of a past that will never be reclaimed; or the horror of the actual event? Or, is immediate safety your main concern; or expedience (i.e. let's just get on with it so we can rebuild the centre quickly); or something else?
But the point is we could "get on with it" along the lines of the below suggested Coventry Cathedral ...
http://en.wikipedia.org/wiki/File:Coventry_Cathedral_ruins.jpg
Surely the most poignant and meaningful monument to those who both lost and risked their lives in this natural disaster - and to those who stayed to rebuild the City - would be to maintain the partial ruin as a space for reflection. The Chrsitchurch Earthquake is now part and parcel of NZ history - future generations as well as visitors to our country deserve more than a photographic/digital record.
rpcas, that is the comment of someone with no respect for anything.
There is no safety issue in rebuilding these buildings, only the scaremongering of lazy unqualified insensitive fools.
There are hundreds of buildings I would not enter in Canterbury that are in current use today. If a rebuilt strengthened Cathedral was completed it would not be one of them - I would not hesitate going inside.
Your average 3 storey timber framed townhouse with lower floor double garage or a 2 level concrete block, block of flats are more likely to be deathtraps than a fully rebuilt Cathedral.
As for leaving, if I and many others I know (that feel the same way) pack and leave, well, there won't be a central city rebuild, or anything much happening in ChCh at all, because unlike most of the moaners here we do own a lot of land in the CBD (over a hectare in and close to the four avenues) and have a large amount money available to spend on rebuilding if we wished too.
The moaners who live in their brick and tiles in Rolleston or Belfast, and never ventured into town more than once or twice a year prior to the earthquake, but now demand that it all be flattened should keep their nonsense to themselves.
Perhaps your right - perhaps a rebuilt Cathedral would be safer than some concrete townhouses. The problem is one could easily find a dozen fully qualified and respected structural engineers that would tell you otherwise.
Your getting your knowledge from your engineer or your buddies engineer or whomever. Who is to say they are correct? Other equally respectable, equally knowledgeable engineers would tell you a completely different story.
Quite clearly the line between damaged and safe is blurred, and what side of the line a certain building is on is dependent on a variety of other factors. So stop thinking your engineer's analysis of safe/unsafe is sound.
Prof Kit Miyamoto is the foremost world earthquake engineering expert:
http://www.miyamotointernational.com/
Most of the guys CERA are using are graduates with limited experience. As alluded to previously many are entirely unqualified to make assessments and many of the assessments are downright wrong or over the top.
We have 2 buildings that were given section 38 demolition orders. Neither is more dangerous than any one of 100s of buildings currently in use in Christchurch. The engineers gave the orders without going inside (we know that because the properties are fully key locked plus boarded over with plywood on all windows and doors plus fully fenced with locked gates. No inspection internally had been completed as none of the boards had been moved and request for access had not been made). So the engineers involved clearly bent the truth in writing their reports.
Our engineer has gone through several times and made detailed reports that he is entirely satisfied with the strength of the buildings. He described the CERA engineers as "being from another planet", which is a very fair statement.
I believe that the engineers at CERA are making determinations for political reasons (ie Sutton and Brownlee have given the order that they want absolutely zero risk and definitely don't want any masonry buildings being fixed no matter how feasible or safe it is). CERA is using its force to "eradicate" the problem so that there is no discussion. They are of the view that the easiest way forward is to start from scratch, this is despite no sensible property or earthquake recovery experts believing that that is the best way.
Quite clearly any engineer will tell you that there is always a solution to a construction problem. A building can be entirely disassembled if necessary.
What is going on right now makes no logical sense, solutions are available, just no one has any intestinal fortitude.
(For your reference I have 15 years experience in development and construction and due to the recent events am now completing a masters in structural engineering).
I said it a while back I thought Chch was finished as insurance wouldnt be easy or even available. Now it makes no sense for a business or residential person to rebuild there when they can move to Auckland or OZ....its quicker, cheaper, simpler and safer. Then I saw that these eqs could probably continue for 5 years and Im convinced of it. In which case I think you would have to be mad to rebuild on an area of land that is looking at 5 years of continued earthquakes and the high likelyhood of no insurnace possible in the not to distance future.....and a lot less work as companies desert it.......Chch could easily be 1/3rd the size it is now in 5 years....hello 100k ppl.
regards
All it takes is some imagination. Look how they incorporated the ruins of the old cathedral in Coventry after WW2:
http://en.wikipedia.org/wiki/Coventry_Cathedral
The initial impetus was to pull down the ruins - how wrong would that have been in hindsight.
http://thearchdruidreport.blogspot.co.nz/
"If the civilization relies on nonrenewable resources, though, the depletion of those resources triggers a downward spiral—catabolic collapse—in which each round of crisis is followed, not by recovery, but by a brief reprieve before the declining resource base forces another maintenance crisis. Rinse and repeat, and pretty soon the capital you can’t afford to maintain any longer amounts to everything that’s left. That’s the extreme form of catabolic collapse, and there’s good reason to think that we’re already seeing the early stages of it in modern industrial civilization"
Merkel knew this a long time ago. Her problem is staying in elected power via a populace who don't. Don't know and don't want to. .
Thats an interesting link Iain, have you seen this testimony from ex-CIA lead asset for Iraq and Libya?
http://www.youtube.com/watch?v=GxJTwbHdH6k&feature=player_embedded
More Saturday laughs
"There is not much new information here actually. Greece was supposed to have met conditions at the end of October, then November, then January, then February.
Every time Greece failed and it did not matter. The EMU granted extension after extension.
However, with the debt swap and protection of the ECB, and with a bond payment due on March 20, time has run out for extensions. The sane thing to do would be for the EMU, IMF, and ECB to accept the very simple fact that Greece is bankrupt and there is no point in giving Greece another nickel, thereby forcing Greece out of the Eurozone."
What Carry Trade? Euro Banks Deposit Entire LTRO 2 At ECB, Bring Total To Over $1 Trillion
When explaining the practical effect of Wednesday's second and certainly not last LTRO, we said that "when it comes to explaining why Europe's banks are not only not deleveraging but increasing leverage while paying an incremental 75 bps on up to €700 billion in deposits soon to be handed over to the ECB, one needs all the favorable spin one can muster." We also estimated that net of rollovers and other tangents, the true net liquidity add would be €311 billion and "the final number by which the ECB's deposit account will increase will be about €210 billion less than the overhead number" of €529.5 billion. Sure enough, as of this morning, which takes into account the full settlement and allocation of the second LTRO cash installment, the ECB's deposit facility has soared by precisely as expected, rising by €302 billion overnight to an all time record of €777 billion, or just over $1 trillion. In other words, Europe has now successfully managed to fool everyone that it is executing the carry trade, when it is doing nothing like that at all, and it continues to park record amounts of cash with the ECB on which not only is it not earning a carry spread, but it is losing 75 basis points as it is paid a meager 0.25% for a deposit that cost it 1.00%. Said otherwise, instead of building a cash position and retaining earnings to fund €3 trillion in debt rollovers over the next three years (by the time the LTRO matures incidentally - good luck paying down that additional €1 trillion, which makes it a total of €4 trillion in maturing debt), roughly 800 European banks will bleed by €6 billion in the next year just to store their cash with the ECB. So much for promises of the carry trade. And we certainly commiserate with all those who bought European bonds on the assumption that they were frontrunning banks who are buying up BTPs, Bonos and what not. They were only frontrunning themselves.
TL:DR the LTRO was deposited at the ECB.
More...MUCH MORE pain for Spain as it falls down the debt drain.
This farce is better than the daily cartoons!
"The announcement cast a pall over an agreement"
http://www.reuters.com/article/2012/03/02/us-spain-economy-idUSTRE8211KO20120302
Spain has just dropped a load on the EU grand agreement....the agreement signed in great ceremony about 24 hours ago....much cheek kissing hugs and handshakes...complete and utter farce...funny as can be...haha
Oooops....the public get an accidental peek at Wall st banks dirty tricks departments...kinda puts the Fed between a massive rock and a unyeilding hard place....pay attention folks....you get to see them with their pants down...the banks and the Fed....far far worse than the nastiest porn.
http://www.reuters.com/article/2012/03/02/us-fed-banks-commodities-idUSTRE8211CC20120302
"Christchurch's Anglican Care minister, Jolyon White, says that even as the ink was drying on the ministerial report, Southern Storm Fishing was "shunting another crew out of the country before they can be witnesses in their own minimum wages claim". stuff.co
The only thing that will get the fools in the Beehive of their butts would be the USA slamming the door on all NZ fish exports to America. The farce and stupidity has gone on long enough. What was the dumb comment..."we dropped the ball"....rubbish!
BH - still believe inflation is not a concern? in addtition to John Williams, The American Institute for Economic Research might disagree with you - as they calculate everyday household items (things that normal people buy at least once a month) are up 8% on a year ago...
http://www.cbsnews.com/8301-505144_162-57387655/inflation-not-as-low-as-you-think
I wouldn't call 8% 'low' by historical terms (like the last 30 years or so), nor would I be so quick to say QE hasn't had any effect on inflation (as yet)...
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.