Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news from South Canterbury Finance Chief Executive Sandy Maier that an announcement on the company's future is imminent.
Maier told Interest.co.nz the announcement would surprise some and impress the government.
It would include 'good and bad' news for South Canterbury Finance. He would not divulge further details.
Meanwhile, business confidence fell again in August and now economists from ANZ and ASB have joined BNZ and JP Morgan in forecasting no hike in the Official Cash Rate on September 16.
They argue a slowdown in the economy will force the Reserve Bank to hold its tightening until December.
Overseas, US disposable income fell in July, its first fall since January. The Dow fell more than 1.4% on the news and the New Zealand dollar fell under 71 USc.
No chart with that title exists.
10 Comments
It is the market in the US that is pointing out the path we are all set to take. The recession there is not going to end before 2020. The cost of credit has but one way to go. The hope that Chindia will save the world...and Noddy...is so much fluff in the wind. Noddy would have been well above the storm had the rural sector not become bloated with debt and the residential sector not infested with maggoty greed. The food exports would have driven a healthy economy. What a bloody shame the govts here failed to act in a prudent way for so long.
Anyone want a loan?
Milkman:
"Someone deposits there savings and someone borrows them via the bank."
I think you'll find it happens the other way around, the loan creates the money - deposits to the banking sector come afterwards - logical when you think about it.
"Why does it need to be repaid"?
Total debt in real terms (share of the economy/wages/profits/whatever) have been rising quickly for forty years now. It is now too big relative to the size of the economy that services it
A widespread pay-down or general default would plunge us into depression, even a slow down in total loan growth has caused a recession.
I don't know what happens next but I don't think it's going to be a "blast".
Last week, the Brazilian government let loose a sudden, “immediately binding” mandate that effectively outlawed all foreign ownership of domestic farmland…
Anyone else heard this story? John Key, you ready to "go Brazillian"?
Read more: Food and Drink Prices to Soar http://dailyreckoning.com/food-and-drink-prices-to-soar/#ixzz0y8NXVgxE
"New Zealand's residential property sector has slipped in July after edging into positive figures in the previous month, while commercial property development continued its precipitous decline"tvnz....................."The New Zealand Institute of Economic Research (NZIER) today warned around 20,000 jobs could go as demand in the non-residential construction sector fell"......tvnz
Not many PIs posting today!
Check this out Wolly. Bloomberg: Australia Bank Bonds Punished on Bubble Concern: Credit Markets.
Has TSHTF for the Aussie market
"Investors in U.S. dollar-denominated bonds issued by Australian banks are demanding higher relative yields on concern the country’s property market is overheating".
http://noir.bloomberg.com/apps/news?pid=20601087&sid=a7czZ.Mm0.xo&pos=3
I will soon as I hammer this out...look what's ahead for the aussies
"Stronger than expected retail trade and building approvals figures and a lower trade gap have ‘‘blitzed expectations’’, making a rate rise by the end of the year all but certain, economists say".
http://www.theage.com.au/business/rate-rise-looms-as-data-blitzes-expectations-20100831-14axb.html
Coming on top of the news today about the bailout and the failure of the bond sale...I'm picking the Kiwi is about to go splat
You lot are so busy with SCF..look what the IRD is up to....
http://www.radionz.co.nz/news/national/55604/income-reporting-options-floated-by-ird
"Inland Revenue has put forward several options to stop wealthy people getting state assistance.
They include adding money from trusts to an individual's taxable income, along with fringe benefits and other sources of cash, before assessing whether they are entitled to state aid.
The Government in May blocked a loophole to stop tax losses on properties being used to make a person's income seem lower.
The new proposals are open to the public for comment.
Revenue Minister Peter Dunne says the proposals might overcome a serious problem, but the Government will await the public reaction before deciding whether to adopt them.
However, the Institute of Chartered Accountants says the proposals may be very expensive to administer.
Tax director Craig MacAlister thinks they are good in theory but could get bogged down in details."
Look what slipped past in the SCF smoke yesterday!
http://www.radionz.co.nz/news/national/55604/income-reporting-options-floated-by-ird
"Inland Revenue has put forward several options to stop wealthy people getting state assistance.
They include adding money from trusts to an individual's taxable income, along with fringe benefits and other sources of cash, before assessing whether they are entitled to state aid.
The Government in May blocked a loophole to stop tax losses on properties being used to make a person's income seem lower.
The new proposals are open to the public for comment.
Revenue Minister Peter Dunne says the proposals might overcome a serious problem, but the Government will await the public reaction before deciding whether to adopt them.
However, the Institute of Chartered Accountants says the proposals may be very expensive to administer.
Tax director Craig MacAlister thinks they are good in theory but could get bogged down in details."
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