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David Chaston details the key news overnight in 90 seconds at 9am in association with the BNZ, including The US Fed has held its official rate target at 0.25%, but it was not unanimous, with a key member dissenting again. He warned of the risks of low rates over an extended period, saying this could be causing imbalances and a tougher policy response in the future.

In Europe, S&P has backed away from downgrading Greek debt after Euro Zone ministers moved to adopt a bailout framework – taking the immediate sting out of the Greek crisis – but possibly raising the stakes when other countries come under budget deficit pressures..

In fact, EU officials have warned the UK that it wants to see faster cuts in the British deficit – and they say it matters not that the UK is not in the eurozone – the Brits need to do this because they are in the EU and have signed up to Brussels policy. Apparently, EU officials don’t believe the optimistic British forecasts, and say the planned deficit reductions are just not good enough.

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Bernard Hickey details the key news over the weekend in 90 seconds at 9am, including news Reserve Bank Governor Alan Bollard has told TVNZ it’s unrealistic for New Zealand to think it can match Australia’s incomes and we should be content with the crumbs that fall off Australia’s table. Australia’s mineral wealth gives it some natural advantages we can’t match, Bollard said.

He also said the New Zealand economy remained fragile and the housing market was spongy, meaning rates would stay on hold until the middle of the year, in line with previous statements.

Meanwhile, the Australian Government announced it would remove its wholesale deposit guarantee for banks from end of March, the Sydney Morning Herald reported. Bill English told NZPA that New Zealand was also considering lifting the wholesale guarantee.

The Dow wobbled late on Friday after weak US jobs figures.

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Bernard Hickey highlights the key news overnight in 90 seconds at 9am in association with BNZ, including news the Tax Working Group will release its report recommending tax changes later today at 1pm.

It is expected to suggest a range of taxes to broaden the tax net to include property investors. See my preview here. These could include the removal of depreciation as a taxable expense on buildings, a ‘RFRM’ tax on equity and a land tax. This would help pay for a cut in the top income tax rate to match the family trust rate at 33%.

Meanwhile, Japan Airlines has been declared bankrupt overnight. It will cut 15,000 jobs and 34 routes, including potentially routes from Japan to Auckland and Christchurch.

Also, Citigroup released results showing a big fourth quarter loss and an overall loss for the year. But it still managed to pay its bankers US$25 billion in pay and bonuses. Bonuses are up again across the banking sector in the US.

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Bernard Hickey details the key news over the weekend in 90 seconds at 9am in association with BNZ, including news Strategic Finance announced a big loss and defaulted on its first payment under its moratorium plan. It may now be put into receivership by its Trustee.

Meanwhile, US retail sales for December fell 0.3%, which was much worse than expectations for a 0.5% rise. That drove the stock market and market interest rates lower as investors fear a double dip recession and deflation.

In New Zealand, we are expecting suggestions for tax reform from the Tax Working Group. Also we will see inflation figures on Wednesday.

Next Thursday (January 28) the Reserve Bank will make its first monetary policy decision for the year and is expected to leave rates on hold, but the market is picking a March rise. The RBNZ may change its own outlook for ‘no hike until mid 2010.’

Alex Tarrant presents 90 seconds at 9 am in association with BNZ.

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Barack Obama has said he wants to ‘recover every single dime’ from the Wall Street bailout in a bank fee plan that may last over 10 years, the New York Times reports. US administration officials said overnight that the fee will be placed on the nation’s 50 largest banks and financial institutions with assets over US$50 billion. The plan would look to claw back US$90 billion in lost bailout funds, although US Treasury estimates show the amount of lost funds could be up to US$117 billion.

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Alex Tarrant presents 90 seconds at 9 o’clock in association with BNZ.

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The bank fee being looked at by the Obama administration could be placed on over 20 of the country’s largest banks and financial institutions to claw back up to US$120 billion in lost TARP funds over 10 years, Bloomberg reports.

Meanwhile, California is after for US$6.9 billion in Federal funds to help the state (and the world’s eighth largest economy) with its widening deficit. Many are expecting Governor Arnold Schwarzenegger will have to revert to last year’s IOU system to pay its bills, Bloomberg reports. Schwarzenegger has been supportive of Barack Obama since the President was elected and voted for the US$787 billion stimulus package. However, Obama senior advisor David Axelrod said: “We recognize they have enormous problems…But we can’t solve all of those problems from Washington.”

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