RBA turns more hawkish on rates; Dow up as US recession 'over'; Gold hits fresh record; Irish woes deepen
Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the Reserve Bank of Australia has warned it will have to put up interest rates again to control inflation as Australia benefits from its biggest mining boom in over a century.
RBA Governor Glenn Stevens said in a speech that demand from China for Australia's commodities was boosting the economy and the bank needed to be vigilant about inflation.
This creates a divergence between New Zealand's flat Official Cash Rate at 3% and Australia's Cash Rate rising from 4.5% to 4.75% by early December.
The New Zealand dollar has weakened to 77 Australian cents from 79 Australian cents in the last week as markets have started to price in this divergence.
Meanwhile, the S&P 500 rose 1.5% after America's official measurer of recessions and growth said America's recession ended in mid 2009 after 18 months.
However, Europe's financial crisis continues to rumble on as Portugese and Irish bond yields rose again to record highs relative to stable German yields.
Ireland has to raise a further 1 trillion billion euros in an auction overnight, which will be closely watched.
The gold price also hit a fresh record of US$1,285/oz overnight as markets prepare for a possible announce of fresh quantitative easing (money printing) from the US Federal Reserve on Wednesday our time.
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75 Comments
Interesting Graph on overvalued currrencies.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100007647/q…
Great link. Will pop into today's Top 10. Topical given the Fed talked but didn't act this morning.
http://federalreserve.gov/newsevents/press/monetary/20100921a.htm
cheers
Bernard
Aymereekan recession ends.......bullshit.
RBA set to raise....fantastic....never made so much so quicky doing so little!
“In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity,” the Cambridge, Massachusetts- based NBER’s group said today in a statement. “The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007.”
Haaaaaaaaaaaaaahaha hahaha what a load of drivel.
did you have a visit from the old bill wally?
http://www.stuff.co.nz/national/4148871/1m-of-gold-and-currency-seized-…
The Duke BH is not saying you should sell now but rather you should not buy as now is not the bottom. That is years away when the economy has started to recover from all the deleveraging of the debt that got the economy into the position it is now in. Only a fool would buy anything now especially if one is borrowing for it. Are you in fact the Man who we all know is a fool as he recently bought another rental in Christchurch. You certainly go on like he does.
You are dreaming The Duke. You are the one on drugs not Wolly. You must know more than the BNZ, Westpac and alike. To have a name like the Duke one would have to be arrogant just like the Man and that arrogance blinds reality I am afraid. The reality is the vast majority of New Zealanders know their wealth in terms of capital is diminsihing by the day. Everyone except you has got a lot more cautious about their spending in the last three months or so and are now concentrating on saving and paying off existing debt. Sounds like you have put all your eggs in one basket which is going to drop in value just like farms and houses. You should not be shitty with commentators who are simply saying you were warned. I hope you have strong tenants and modest debt as times are changing. I for one would not want commercial property in Auckland as tenants have plenty of choice if they want to shift.
Think about it Dookee...yes it's a hard thing to do when you don't normally think too much but give it a go...why would Warren be saying things like that?....the same comments he had halfway down the slope in 08....when he bought Goldman and watched it fall and fall...
You really must learn to do your homework Dookee boy....go check out the graph...Goldman fell to near $50....Warren called it wrong... http://uk.finance.yahoo.com/q/bc?s=GS&t=2y&l=on&z=m&q=l&c=.
Here is a copy of the garbage you posted:
"Dow up another 150 pts, US corporate earnings are booming. What is the next step? They start expanding and hiring again. Then consumer spending recovers, then asset prices go higher. This is how an economic cycvle works. Dont you lunatics realise that we are at the bottom of the cycle? that this is where smart investors buy with their ears pinned back and make a killing over the ensuing 5 years? Idiots like Bernard think that you should sell at times like this, right at the bottom of the market. You turkeys really need to wake up and understand that Bernard is a mile behind the eight ball. A laughing stock if you will."(sic)
"idiots like Bernard"...!
"You Turkeys"....!
"Bernard is...."....!
I'll stick to being simple.......
Yes washed up and cashed up and not working and having a lot of fun. I think Warren was talking about the States Duke, certainly not here where the recession is just starting to bite in the majority of NZ homes. I talk to agents in Auckland in the commercial property sector. That part of the property world is getting more and more stressed just like housing and rural. You should have got rid of everything but the home in 2007/2008 like I did. Not washed up. Retired and in the real world which is paying off its debt and as a result any capital asset is reducing in price as demand for property and debt drops off by the day. Wolly god help us knows more than you. Have you not heard of diversifying and going with trends.
You wouldn't be the first dumb Duke.
Those 'cycles' only happen on a growth path, and on the up-side at that. History is littered with examples of the down-side, but sometimes the written records are scanty - the scribes were under stress at the time.
This time, we're into the downside, globally. A first. Oil supplies have been flat since 2005, but with a declining EROEI. The only increase has been in China's coal consumption, which has manifest itself, unsurprisingly, as 'growth'.
It's energy, and nothing but energy, Dukey boy. Finance rides atop it, and is doomed without it.
Question: What's your worth worth, at the end of energy supply?
Answer: Diddly squat.
The whole process falls off a near-term cliff, beyond peak energy. It may be that the price doesn't go up, it may be that the manifestation is less and less folk able to buy it - given that it iunderwrites wealth, that's and entirely likely alt outcome.
This time it's different, and it was always going to be so.
As far as I understand and experienced since the 21st century the world has changed and is fast changing for ever not only for part of the world, but for the entire globe.
What I often hear/ read from other people even experts are arguments from history books of any kind placed into the current time – how short- sighted !!
Never in the history of human, are we on the verge of disrupting even destroying natural life / nature. Never in the history of human worldwide economic, political, cultural, social and environmental problems accumulated and intensify to such a degree. Never in the history of human are these events so closely correlated to each other.
Therefore - it will not be more “Economic Cycles” as we understand it – people. Agree powerdownkiwi (great name)
Yes, the notion the US ever came out of recession, or is out now, doesn't stack up at all. From: http://blog.mises.org/13949/nber-recession-ended-last-june/
Quote:
"
Just in case you hadn’t realized it or that it doesn’t seem like it, according to the National Bureau of Economic Research, the recession ended in June of 2009. You see they got together and had a conference call yesterday and decided that last June the U.S. economy turned positive.
Never mind that the U.3 and U.6 unemployment rates were 9.4% and 16.4%, respectively, in May of 2009, supposedly the last month of the recession while last month’s U.3 and U.6 stood at 9.6% and 16.7%. Real Private Fixed Investment continues to sink. Consumer and business bankruptcy filings continue to climb. One in 8 people in America are receiving food stamps according to Reuters. And in three-quarters of U.S. cities foreclosure filings are on the rise.
According to a CNBC poll, 90% of Americans are worried about the economy. There is talk of another stimulus package at the White House and more quantitative easing from the Fed. Evidently, the wise ones in Washington weren’t on the NBER conference call.
The CNBC poll also revealed, “A clear majority of Americans, 55 percent, believe that the president’s economic plans have made things worse, running up the deficit without ending the recession or creating new jobs.
“Only 42 percent say the president’s policies have helped avert a worse crisis and are laying the groundwork for further growth.”
The folks at NBER must know something the rest of us don’t. Even rich folks are unhappy with the way things are going. They first took a hit on their stock portfolios, then their real estate holdings and now the President would like more tax money from them to pay for the continued Keynesian stimulus programs that have lifted us out of the financial meltdown and the recession (except no one realizes it). "
Of course the folks at NBER know something that we dont...Their sons daughters auntie uncles etc....All work for, and are, the pillars of the ' Industrial Arms Chemical complex" The five percent that have most of the wealth, and arguably are the most usless waste of spaces the modern world could produce .If Character was the currency,they'd be broke.
We are fed a load of Propaganda, and most believe it,,thats what being " politicaly correct" and '"It woudnt be appropriate" was all about. The only saving grace is that a small proportion of the population have the intelligence to see between the lines. But In the end we are only Naked Apes,that got lucky,and have manipulated our environment to a state of exhaustion ,and the joke is some people actually think they matter.We will all die ,and in fifty years no one will remember our names.I wish I knew what it was all about..Mabey Wally knows?
INFLATION is pure and simple THEFT by the government
http://www.marketoracle.co.uk/Article22809.html
You can either move your capital out of Noddy or stuff it in a long term deposit and risk the damage done by missing out on very high rates which must come. What ever you pick, understand your capital is declining by the real rate of inflation every bloody year thanks to your govt and the RBNZ. Suckers!
What's the next step,Duke asks?
jeez ,duke, that's obvious mate...property here in NZ is going to really start to rock and just power upwards even higher than it did at it's peak in 2007.
You're onto it, Duke, so you lead the way and get out there right now and buy those houses like there's no tomorrows. The banks are bending over backwards to lend money ,i hear, so you'll be right for finance too.
go hard, Duke, or go home.
Thank God for the wisdom of The Duke is all i can say, fellow interest.co.nz commentators....thank the Lord for The Duke !!
It is a hard fact to grasp isn't it Duke....there are peasants out there who now refuse to accept the events of 08....they point blank refuse to believe finance companies crashed....that billions were lost here in Noddy alone...that the govt had to rush in a guarantee to prevent a run on the banks....they refuse to believe SCF has gone under....they still do believe the earth is flat and the universe only 5672 years old....that matter cannot be energy...that Noddy is not one giant ponzi property gambling bubble of madness.
It was hardly headline worthy but a decision today to call an end to the US recession was a green light for equity investors.......lead by well-known and highly respected New Zealand investor called The Duke.
The decision by the National Bureau of Economic Research, which dates business cycles in the US, seems a tad out of date. The bureau declared the end point to have been June 2009 - that’s right, more than a year ago.
think this may be what you're referring to VL...but it was last week...or maybe it's on it's way here?
http://www.econference.com.au/Financial-Review-National-Energy-Conference-2010.html
yeah that was it....
from the odt:
This year's keynote speakers include Farouk Al-Kasim, credited with much of Norway's success as one of the world's leading oil-producing nations, and Bill Buechler, a US-based investment consultant with Buechler Capital Asset Management, who also launched the Kiwi-Pacific Fund to invest in New Zealand and Australia and the South Pacific region.
the american chap was on the radio last night saying how our lack of investment of these revenues was myopic....where's andy hamilton when you need him?
Gee that's some outburst there Dookee.....did we touch a nerve with the drill....you didn't like the suggestion that you maybe fail to understand basic economics...oh dear how sad.
" ....who is refusing to accept that all those things happened..." you didn't read it all did you Dookee!...back you go and have another read.....
goodness,gracious me...wally and the duke are having a cyber-punchup now!!
settle down you two....here eat this!..it's fresh in today
Economists have wound back their expectations for New Zealand’s recovery, in step with the central bank’s view that it will raise interest rates at a slower pace to nurture a fragile economy.
New Zealand’s economy will grow 2.8% in the 12 months ending March 31, according to the NZIER Consensus Forecasts survey. That’s down from the 3.2% expansion forecast in the June survey. Growth in 2012 was trimmed to 3.1% from 3.3%.
Trim and tuck Rob...they don't wanna be a mile out when the GDP bomb arrives on Thursday...should boot the Kiwi$ in the guts...kaching.... more for me! I hear some blather about there being a migration gain over the winter....funny it didn't show up in the property blurt...I think they arrive in Auckland take one look at Dookee's paradise and scoot off to Aus on the next flight.
Why get caught up in fruitless arguments whrn you can't change people's world view??
Once someone has created a set of beliefs about something they will continue to filter all information in relation to that world view, and that is particularly true of opinioned people who like to blog all the time.
Dont worry muzza..People believe what they want to believe..If you say something that worries them in their comfort zone thay can get nasty....Like How about oil hitting $200..a barrell very soon...whoops now i've done it..ow!..Why should that happen?...because Israelies civilians have just been issued with Gas masks like they did before the last two gulf wars.Plus the fact that the Bunker buster bombs are already in Diego Garcia..they were sent from California a couple of weeks back. This will get serious..the Russians are backing off..But the Chinese arn't as a third of their oil comes from Iran,how can they?.read on..http://www.historyguy.com/iranwar.htm It seems that now its not if but when.
So what happens to Americas debt to China if God forbid things get really tasty? Id say their would be a get out of jail card free,somewhere. It's serious.
Talking about meaningless drivel..... http://www.marketoracle.co.uk/Article22857.html
Wally that link is a "Must read"....It almost like Ray Bradbury could see the future.
Oh by the way seeing that Fidel Castro and Hezbolla, probably have shared a few reminicences about past struggles, I note that he's just put out a document warning his people of an impending disaster, thats why he's released 50% of the Civil service to get food production up.Theirs also a few reminicences about Angola.
Wolly if you did not comment so often and dribble on such much and talk nonsense when you commented it would probably stop the attacks. Do you have a life. What would happen if this site closed down. What would you do? You would have more credibility if you commented less often and actually said things people understand. I can see why some think you are an idiot as some of your comments are just downright tripe and not understandable. I am only saying this to help this site which I believe you have hijacked as if it is your private playground. You do your cause no favours at all.
What nonsense!....insurance premiums set to rise....economy showing almost zero growth....gst going up....low wage economy set to continue....property seriously unaffordable...banks making massive profits...Bill borrowing a billion a month.....I guess what you are saying is if I stop posting about these things...they will all go away...what nonsense.
Here comes the inflation.......
"...insurance premiums are expected to rise in Marlborough over the next few years as a result of the huge number of claims made following the Canterbury earthquake.
Marlborough Financial Services adviser Ross Frater said the company had been told an increase in insurance premiums was likely and insurance companies would be tightening up their practices significantly.
"Insurance companies across the whole country will be affected by the earthquake," he said.
"The cost of Christchurch will be passed back to everyone." "
http://www.stuff.co.nz/marlborough-express/4149790/Owner-expects-house-will-be-demolished
anyone who chooses willingly to live in marlborough esp.blenheim deserves to be inflated!.
of course, premiums are going up for all of us as we pay the piper for the chch e/quake..but it works in reverse no matter what cataclysm occurs in whichever area of our great country.
did you know the fire services are largely paid for by the insurance co's?.
jeez, she's slim pickings on here today.
Bloody hell- who is going to pay rising rates- taxes, insurance, grocery, mortgages etc. ????
Most insurance premiums are rising. With worldwide Climate Change events on our door-steep I’m wonder how much longer people can afford to pay for ever rising premiums – a real dilemma I think.
Risk on the down-side of the Hubbert Curve is not underwritable.
Period.
The goal-posts simply run away from you at uncreasing speed, meaning you're trying tounderwrite more and more shyte with less and less backing. We went past the crux probably with AIG,and we ain't going back. For a short time - perhaps 5 years, they will attempt to keep things going by socialising the debt/risk.
At some point, the mob will turn, and/or the smoke won't hide the mirrors any more. Watch the fattening cats try to convince the thinning kittens to vote democracy out of existence, and feudalism/warlordery (sorrry, I meant the free market) in.
Read of the day - a ducal must:
the automatic earth (the most recent posting)
an excerpt:
"The main critique of this essay is that the viewpoints described above have a fundamentally flawed perspective on our current economic predicament. Whether it’s the left or the right, the free marketers or the socialists or many of the shades in between, the mainstream consensus is one of desperate hope for a rapid return to continuous economic growth, low unemployment, relatively cheap finance and rapid consumption of natural resources".
The last bit is the key.
Thankyou Bernard / Amir : I'm back ! Cheers for the help .
Mist a great stoush between the Duke & Wolly . Winston Churchill was right , sleep in til noon , let everyone else get on with the fighting , then spend the evening downing a quart of whisky ...............There's a leader we can all emulate !
Hey Bernard : You say that the Irish gumnut are trying to raise a trillion euro ............. trillion ? Another rocket ship to the sun , maybe . They learnt the lesson from the Bogdon O'Keefe mission which burnt up ..................... gonna go up to the sun , this time at night ?
Poor old Wolly ................can't even spell his own name right ( says one who did just that on his school cert. English exam paper 1976.............. I passed ! )
The NPA ( New People's Army ) are on your side , Count-of-Christov ! And the native are revolting .................. although some of them are nice chaps .................... Viva le revolution !
[ 2 sacks of rice , and 3 small bottles of Tanduay rum ........... not a bad price to pay for a bunch of mercenaries ]
I'm fascinated with the time the vast majority of posters on this site comment, is anyone willing to admit to posting during work hours?( Apart from Bernard ) Wolly would have to be self employed..................?
I think what Wolly is trying to say but struggles to because of that classic kiwi bloke mentality (wouldn't want say exactly what I feel cause it might lead to some form of genuine emotion that could be regarded as weakness)................issss......He is honestly concerned at the direction New Zealand and the rest of the western world has taken. Capitalism, consumerism and Democracy are now in ICU and greed and self centred leadership are to blame.
I would like to say more but it's my turn to do the dishes, by the way I'm a tough guy too.
I didn't mean people to beat up on Wally, the point I was simply making is that he is so entrenched with his line of thinking, nothing is going to change that, so no point getting into a fruitless stouch. The flip side to the coin is the likes of Ollie and he is equally convinced with his world view and you won't change that either.
Both can't see the reality is probably somewhere in the middle of the 2 viewpoints
Wally has a lot to contribute but he gets it all tangled up and it comes out like a cross between fred dagg and john.a.lee...
.i think he feels at home here on this site so i guess we just have to accept him like the naughty ole boy that he really is and just pat him on the head and hope he'll get back in his box..but he's o.k !!
considering he comes from blenheim.
I fel with Wally. As we are all experincing the way the world is going is not good - the majorite of people are stubid, not interested, not edicated not even wiling to learn. They believe the world is good and yes this is frustrading.
So, a minorite of people you, me and Wally have a big task edicating others. It is almost like propaghana consistancy telling people again and again to make them listen, how shity the world realy is. Without us it is very dificult to adchieve that.
What Wally, me and a few others aren’t relizing is on Bernhard’s blog are in fact only intelicent and good edicated people. So it looks like we are stubid. But I can insure you we are not. We are just repeting ourselves to warn others not to make the same misteaks.
By the way I’m also from Marlboro.
.
Kunst, you can't educate those who don't want to learn. Those who believe that the governments and corporations of the world are working for them, and that the systems we rely on for our well being and quality of life, are in fact free and open, not the manipulated abortions they in fact are. They will never believe otherwise because to do so requires them to, read and reflect internally about some very serious issues. In turn this might open up a Pandora’s box of personal problems which too have been glossed over, and most people are simply not up to dealing with those truths. Being someone who reads, learns and understands as much as I reasonably can, I do sometimes begin to see that ignorance can be bliss, even though it is unacceptable to me, yourself, people like Wolly et al, there is just no point beating the same drum continually to them.
That said, keep the updates and information coming, because I, and many others enjoy it and understand what its about. I do not enjoy the useless slagging matches such as today between Wolly & Duke, they reduce the site to farcical at times.
I absolutely agree with you. I personally miss the participation of other bloggers on some interesting and important issues. I particularly like the politically independent, fresh, informative and also amusing contributions of many.
You wrote: I do sometimes begin to see that ignorance can be bliss. Hmm - I think I learned something.
Trust what you learned from my statement is what I meant which was "When you read and understand what the situation really is, and frankly you don't have to try too hard to get an idea, it becomes apparant that it's going to end very badly at some point, and the really hard part to digest is the seemingly helpless ability to stop it, or even slow it down". Hence, I do understand why many choose the ignorant path.
Human greed by the sharp end of the pyramid will not stop. What the reasons are behind this drive to whjat will ultimately affect them too is, I genuinely have yet to work out.
I think I've worked that one out.
The species evolved wth the best genetic strains for a given set of circumstances - it reproduced as fast as possible, because survival was so uncertain. It favoured the strong - the best spear-thrower survived better. It evolved in the up-times - plenty for all, conquer another continent if you run short.
What it didn't do, was evolve a gene to react to down-times. Time and again, societies have faced the problem, and (with the questionable exception of Cuba) mostly reacted by blindly doing more of what they had done so far - fiddling while Rome burned. No collective ability to address and adapt.
I think it was Jay Forrester, said that if we don't get it right here and now, then it is reasonable to assume that no dominant species on any habitable planet will get it right - there will simply be a time where they will be swarming, and will hit Peak consumption. Perhaps they too will have done the big lurch fuelled by stored-over-aeons energy, and partied like there was no tomorrow.
Perhaps they had PDK's of their own, but their media was owned by Cornucopians too?
Maybe they even had a Wolly.
It is the utter frustration felt by the fool who tried to tell of the potential collapse of ....take your pick...a stadium roof...a footbridge for Commonwealth Games participants!....an economy built on waves of credit, BS and greed....and the fool is ignored...indeed the fool is laughed at for what does the fool know...he suffers from too much education...too many memories.
I do wish I had cut a message into the Tawa in the PMs office when I worked there...but what to cut!
Wolly, yes you genuinely do have a very sound understanding of the systems, the way they work and the way they are broken. Those that can interperet your wordings, like myself I find it very entertaining and informational all at the same time, so don't change that.
I think something that possibly you may not be factoring in this time, is that the systems are so broken now, that there has been an unprecidented coordinated effort to keep the ponzi scheme going. How long can they keep it up for is aguable...Indeed things are now very different read, manipulated when compared to previous recessions pre the automated "Big Bang" on the global exchanges. The rules have been bastardised, but will end up at the same result. The timing is just harder to predict nowadays.
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