90 seconds at 9am with BNZ: Britain offers help for Irish banks; Federal Reserve eyes full US$600 billion QEII

90 seconds at 9am with BNZ: Britain offers help for Irish banks; Federal Reserve eyes full US$600 billion QEII

Gareth Vaughan, sitting in for Bernard Hickey, details the key news overnight in 90 seconds at 9 am with Bank of New Zealand,including news that European Union and International Monetary Fund representatives will open the books of Ireland’s heavily indebted banks in Dublin ahead of a possible aid package.

Finance ministers from the 16 euro zone countries said this assessment will decide whether Ireland can fix its crippled banking system on its own or whether it needs a 750 billion euro rescue.

Britain, whose banks have the biggest exposure to the Irish financial industry, has abandoned its hands-off policy toward the euro region. Chancellor of the Exchequer George Osborne said Britain is willing to contribute to an aid package for Ireland.

A sub-index on Ireland’s stock market covering five banks gives an indication of just how bad things are for the banks who are loaded with toxic property loans. The ISEQ Financial Index of banking stocks is now worth just 2% of its peak valuation reached in February 2007.

Meanwhile, United States Federal Reserve officials say the US central bank is likely to follow through on its entire US$600 billion Quantitative Easing II, bond buying or money printing programme, because of an expected weak economic recovery. Although the so-called QEII has come under fire from critics who say the Fed is devaluing the greenback at the expense of trading partners and sowing the seeds of inflation, Fed officials say QEII should reduce the US unemployment rate by half a percentage point adding 700,000 jobs by 2012.

Elsewhere carmaker General Motors, which was bailed out with US$50 billion of taxpayers’ money in 2008 and 2009, is hoping to raise up to US$22.7 billion in an initial public offering. It could be the biggest IPO ever in the US, reducing government ownership to 33% from 61%.

Here in New Zealand Finance Minister Bill English has poured more cold water on the prospects for economic recovery, saying this morning the Canterbury earthquake, a lower than expected global growth outlook and a faster than expected adjustment by households away from consumption, will flow through into a lower growth forecast for the year to March 2011.

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23 Comments

Morning Garreth....

I can just see Britan's pitch to Ireland in regard to taking up the offer...

Remember the card table scene in One flew over the Cuckoo's Nest.......where the effeminate guy  became unsure of himself and indecisive as a consequence.....one loony starts up with play the game..play the game..play the game and within seconds it descends into chaos....maniacal screaming and hand banging on the table........

"To Play the F*&*ing Game" 

I think it will get there almost as quickly.....what say you...?

Top of the morning to you again. I reckon there must be some Tory and Blair-Brown era politicians from the 1990s feeling very smug. They were under pressure to ditch the pound for the euro but didn't. I was living there at the time and it looks a pretty good call today...

That said, they're going to have to pitch in to help the Irish anyway.

English skipped over the storm damage and made no mention of the Kiwifruit disaster or the rotting homes and school buildings liabilities....wonder why?........the "adjustment away from consumption" is another way of saying the peasants have less taste for cheap credit now that they can see property values are bloated and higher credit costs are on the way thanks to the piigs and the crooks at the Fed. 

Welcome to the new normal Bill...this is it boy...this is where it stays if we are lucky...if not, expect to slide deeper down the hole.

And there is that burger again.....you'd think they would have forged one by now....it's what they do......but then I guess it's not the "Burger" is it.

3rd of Nov. 2010 - 600 billion - 700’000 jobs – General Motors – what’s going on here ?

Global military expenditure stands at over $1.5 trillion in annual expenditureat current prices for 2009, and has been rising in recent years.

http://www.globalissues.org/article/75/world-military-spending

Hello Walter......are you well........did the Big B swing by unannounced......?

I see GBH is smartening up  and starting his own drug cartel .......tossed a kg over the neighbours fence...tipped off the local Constab....now he's got the whole bloody cove to operate in.....such a capitalist....you got to admire his forethought on that one.

Moving rocks indeed..

We should use some of the 1.5 trillions and strom the Beehive the 27th of November - Viva La Revolution ! - operation "Shrinking"

3.5 $US Billion deal ! Under the deal announced by the Pentagon on Friday, Lockheed will produce 10 F-35A conventional takeoff and landing models for the U.S. Air Force, 16 F-35B short takeoff/vertical landing variants for the U.S. Marine Corps, four F-35C aircraft-carrier variants for the U.S. Navy and one F-35B for the British Navy, the Pentagon said.

The U.S. and eight nations partnering in the project -- Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway -- plan to acquire more than 3,100 F-35s. Israel recently announced plans to purchase about 20 at a cost of about $96 million per aircraft.

full article: http://www.reuters.com/article/idUSTRE6AI5PF20101119

This is of concern ! The serious question is why can the West “afford” such world military expenditure, but struggles to pay for education, medical care and infrastructure ? How serious is the global, economic/ political situation ? http://www.bbc.co.uk/news/10184610

 Bernhard - I think (and I say that again) it is time to analyse the worldwide situation more comprehensive and connect the dots in order to plan for our economic future - right here in New Zealand. Widely accepted traditional forms in behaviourism are on the verge of a major breakdown. We’ll have to rethink.

Danny Blanchflower was on the BoE voting panel during the vast credit expansion of the mid 2000's. He was renowned as an ultra-dove (constantly voting for interest rate cuts and against rate rises) even as the UK housing bubble reached previously unheard of proportions.

Having been a footsoldier in the vanguard of the army that created this mess he is now quite clear how it should be solved:

''But there is a better way – five or six years of 5% inflation does the job nicely. That way we get to inflate our debt away and we don't have to go through all this austerity nonsense. In the long run, interest rates need to rise back to some normal level – say 4% – so that when the next shock comes the Bank of England can cut rates. For now, interest rates have to stay at 1% or lower until at least 2015, which hopefully will create some inflation. And more quantitative easing would help, as that adds more stimulus to the economy – which is positive for house prices.

http://www.guardian.co.uk/commentisfree/2010/nov/16/house-prices-tumble-...

Read it and weep - that such idiots had a role in shaping economic policy in one of the major G7 economies in the past decade tells you everything about how we arrived at where we now are.

Re: the Irish crisis (and indeed by extension the crisis of capitalism) and the rescue of 'bondholders'.

Ever wondered who these incredibly powerful 'bondholders' are? These beings that have to be rescued at all costs - including at the cost of an entire nation's taxpayers?

All is revealed:

http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-b...

Interesting stuff andyh.

Trademe mortgagee listing so far this week:

Monday 1

Tuesday 14

Wed   4

Thurs 6

total so far 25.

GM stock is 7 times oversubscribed ! You just can't get any for love nor munny .......... Remind me someone   ;   these were the bozos who for decades didn't listen a jot to wot the customers were telling them . And who allowed the Japanese car-makers to take the entire small and mid-range section of the industry , " 'cos we know that the American consumer will always want to drive big American metal ."

............ And now the Indians and Chinese are invading the industry with cheap mobile death-traps of their own .............

7 times oversubscribed : F*ck Me !

Gosh Gummy.....don't you drive a Yank tank....I've put you down for 10ooo shares...think of the help you will be giving Barry Obama!

Well , shag me ! The little General rocketed up 6 % on the first day of re-trading . That's even better than a property syndication by Bayleys . Bugger  " sliced, diced and porked " dairy farms or supermarkets , as advertised on that bastion of investment advice , Radio Sport . .............. Go go go the General !

Another day and another crisis for the govt to downplay....PSA to cost 75 million....you couldn't make this up...a disease that spread this bloody fast and they are going to contain it to just 700 hectares already infected!.....not a hope.

 "In New Zealand in 2007, just under 12000 hectares were planted in kiwifruit. By far the greatest concentration of orchards is in the Bay of Plenty" (encyclopedia nz)

So what do YOU think the real cost will be?

 

Took me a while to figure out why its so hazey in the Mount today. The burning must have started. Can hardly see the Kaimai's!!

Securities Commission lays criminal charges against Huljich Wealth Management Limited and director Peter Huljich - http://www.seccom.govt.nz/new/releases/2010/181110.shtml

Who are the other directors of  Huljich Wealth Management Limited?

The 2nd director is a certain John Archibald Banks. Don Brash is no longer a director.

Hahaha ... you couldn't make that stuff up either!

:-)