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90 seconds at 9am: China growth surge; RBNZ rates outlook; Raja sued
October 23rd, 2009Click here to watch this morning’s video.
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news that China’s GDP rose 8.9% in the September quarter from the same quarter a year ago, which was stronger than the 7.9% growth recorded in the June quarter. However, China plans to continue pumping in more monetary and fiscal stimuli, the FT.com reported.
This is good news for Australia, which is our largest trading partner, and for demand for commodities. China is now using its US dollar cashpile to buy access to commodities and technology, including in New Zealand.
Meanwhile, our Reserve Bank is expected to hold the OCR next Thursday, but will be under pressure to drop its promise to leave the OCR at 2.5% until late 2010 as the economy recovers strongly.
Meanwhile overseas, the US Federal Reserve has announced sweeping pay cuts for bank bosses as US voters revolt over new bonuses, Bloomberg reported.
Also, Sri Lankan born hedge fund manager Raja Rajaratnam is being sued by victims of Tamil Tigers who say he backed the Sri Lankan rebel group. Rajaratnam is also accused of insider trading and his Galleon hedge fund is now being liquidated, Bloomberg reported.
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October 23rd, 2009 at 9:34 am
Oh goody…China going gangbusters and commodity hungry..especially for copper.
October 23rd, 2009 at 10:20 am
Calm down Wally ! They got a mega-stimulus package running , c/o the Peoples’ Unelected Government . The private sector is still struggling . Manufacturers / Exporters are getting less for their produce , abroad , than before the melt-down . Take away the stimulus ………… = Take away the bottom deck from a house of cards .
October 23rd, 2009 at 10:25 am
We can assume they are doing it on residual cushioning, but that has to stop in 2011.
The things to put in the crystal-ball mix are exponential demand (even in a ‘recession’), and the quantities produceable of finite resources.
If there is no substitute, and the resource is essential, it takes the system down.
Achille’s Heel, all that.
The bellweather for the Boolian algebra is oil. A sinking lid from here on, cumulative and accelerating. Total global GDP can be expected to mirror, so if China’s up, somebody else is (jointly or severally) down. An Oil price ramp signals demand, then at a certain point it skews the relativity in the system too much. Pop goes the weasel. Repeat, with lower lid.
October 23rd, 2009 at 10:58 am
@powerdownkiwi: Ive never been an experiment in a test tube… After $147 oil sent the world into the worst recession since the 1930s….I have to wonder what the second spike will do and when its going to be here, Govn’s are spent out….pity Im watching from the inside.
Some say oil could get to $200, even $500….I dont see how….countries will just stop buying oil because they wont have “real” money to do so. China will indeed take it but there will be no one buying their goods…so huge shifts seem on the horizon…interesting but not pretty times….
October 23rd, 2009 at 11:00 am
@RT: Indeed, which leads to internal chaos…they, indeed we have built our own nightmare…
October 23rd, 2009 at 11:03 am
Todays word:
BAILOUT
The type of fellow who hangs around Pamela Anderson
October 23rd, 2009 at 11:06 am
How dare you, that is defamatory.
October 23rd, 2009 at 11:08 am
Bailout : Operation to feed livestock , with dried compressed grass product . Opposite of ” CRAFAR ” .
de-Pametary , not de-Famatory
October 23rd, 2009 at 11:21 am
BULL PUCKEY,
I know when my name is being taken in vein..VAIN eh….I have heard a lot of this just recently.
May have to build an Anderson shelter, Two hammocks and a beach umbrella.
October 23rd, 2009 at 11:56 am
Who knows what to make of how things are going in China? This is a real eye opener:
http://www.pbs.org/pov/utopia/
Synopsis
Is nothing American sacred anymore? The largest mall in the world turns out not to be the famous Mall of America in Bloomington, Minn. It’s the South China Mall outside of Guangzhou, China. Outdoing the techniques of American consumerism, South China Mall is Disneyland, Las Vegas and Mall of America rolled into one. There are carnival rides, mini-parks, canals and lakes amid classic Western-style buildings with space for hundreds of shops.
But along with the glitz and glory of middle-class shopping, the mall’s Chinese developers seem to have imported something else — a cautionary tale of capitalist hubris. Alex Hu, a local Guangzhou boy who made it big in international business, wanted South China Mall to be a hometown monument to his success — even though Guangzhou has no major airports or highways nearby. And four years after its construction, the mall sits virtually empty of both shops and shoppers. But the Chinese have imported yet another concept familiar to Americans — South China Mall is considered too big to fail. So, employees line up for flag-raising ceremonies and pep talks about “brand building” before going off to maintain the deserted concourses meticulously. If China is the future of the world economy, Utopia, Part 3: The World’s Largest Shopping Mall just may be a startling peek at what’s to come.
October 25th, 2009 at 6:04 pm
See below link re-China.
http://www.stuff.co.nz/business/2997980/China-venture-fraught-with-peril
China really should be taken with a pinch of salt.
Just as they pinch most things, including mug investors money, pirate all manner of goods replicate then and on-sell to the markets of the World.
If there is a booming business there, it is in buy-passing the copyright process.
They are a canny lot with someone else’s money too. As are many many of our so-called experts in Finance and Politics, they will get into bed with the devil.
No wonder we got a ‘Free Trade’ agreement so quickly, they both want a free market for their products and to launder their ill-gotten gains, buying up our Companies and moving in and taking over at a knock down price and with the gullible’s money too.
Perhaps it will be fair game for China to take a stake in our farming industries, what with the Ponzi schemes being perpetuated and encouraged here and abroad by our own major Corporations and Government.
What do you THINK.