Post RSS Feed 
Podcast Feed
90 seconds at 9am: De-facto tightening; Bollard speech due; Toyota recall extended; Greek fears roil markets
January 29th, 2010
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with BNZ, including news New Zealand bank lending fell NZ$2 billion in December from November. Business lending slumped most and farm lending fell too.
Banks are being much more cautious because they need to preserve their own capital and their funding costs are high. This is producing a de-facto tightening of monetary stimulus even though the Reserve Bank has the OCR on hold. RBNZ Governor Alan Bollard is due to speak at 1pm today on the outlook for monetary policy. We will have extended coverage of the speech from 1pm.
Meanwhile Toyota has extended its massive recall overnight of its popular Camry and Corolla models to Europe and China (not Japan as said in video) from the United States after problems with its accelerator cables jamming. Ford has also been hit slightly in China with a few cars using cables from the same parts maker. Factory shutdowns are costing Toyota NZ$500 million a week.
Meanwhile the Dow was down 1% in late trade on global recovery fears driven by talk Greece may require a bailout from other European countries, which they quickly denied. Moody’s also warned Portugal’s sovereign rating may be downgraded unless it controlled its budget. Fears about European sovereign defaults drove the euro down to a six month low.
Tags: 90 seconds at 9am, Bernard Hickey
You may also like to read:
Loading ...
January 29th, 2010 at 9:14 am
But bank lending to residential property sector increased!…now what does that tell us about Noddyland’s property ponzi economy……Here we are nearly halfway through this socialist govt’s term and they have done fanny adams to throttle the property madness and divert investment into productive areas. Anyone would think half the govt are deeply invested in the property sector and determined to keep the ponzi cash cow milk flowing their way.
January 29th, 2010 at 9:37 am
Wally: Yes, I agree. When Labour was at the helm you could argue that the property pyramid scheme was an unintended and unanticipated consequence of various policies enacted for socialist reasons, however poorly thought out. National knows differently, the dysfunctional outcomes for the productive sector & overall economy of the existing tax system etc are clear to all NZers to see (except for a few hundred thousand landlords of course, a number of whom post onto these blogs). So a failure to rebalance the economy will see history judging them very harshly.
I notice that Brian Gaynor, in his ever-perceptive Herald article on Saturday, was pessimistic about the chances of structural reform – he seems to think will be an opportunity lost. “the muted response to the latter report by Finance Minister Bill English indicates that little or any of its recommendations will be implemented”. Depressing, but typical of our myopic politicians.
Cheers.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10621706&pnum=0
January 29th, 2010 at 10:04 am
lending schmending
Only New Zealanders need to borrow from New Zealand banks to prop up the housing market.
Off shore investors can borrow offshore and invest with cheap money. (Thanks from the Growth Lobby are due to the National party for relaxing the rules on immigration / foreign investment. Cheers guys. Bollard must feel like its whack-a-mole. Whack down on onshore bank lending to the property market, and offshore sources of funds pop up!!)
If the taps get turned off in China / US and Japan, then there might be an impact.
http://www.telegraph.co.uk/finance/financetopics/davos/7085197/Davos-2010-Chinese-central-banker-Zhu-Min-warns-of-new-Asian-crisis.html
My call for Wally. The Bubble in Copper is bursting.