90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: NZ$ drops as US interest rates rise in wake of US tax cut deal; Chinese tightening expected this weekend

9th Dec 10, 7:38am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the New Zealand dollar fell more than 1 USc to 74.7 USc overnight after the US dollar strengthened.

US longer term interest rates have surged in the last two days in the wake of US President Barack Obama's deal to extend tax cuts to America's rich and its middle income earners.

This makes the US dollar more attractive.

The US 10 year treasury bond yield rose to3.27% overnight after its biggest rise in almost 2 years. Investors are worried Obama's moves not to reduce the deficit make it more risky to hold the bonds in the long term.

Meanwhile, there is also talk that China will tighten monetary policy with an interest rate hike this weekend to control inflation.

The Dow was flat despite the fears of a Chinese rate hike.

The Australian dollar also strengthened against the New Zealand dollar after firmer than expected mortgage approvals and expectations of a lower unemployment rate reignited talk of an earlier hike in Australian interest rates.

Our Reserve Bank is expected to leave interest rates on hold at 3% when it announces its decision at 9 am today.

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15 Comments

by Wolly | 9th Dec 10, 8:48am 1291837728

Sorry Bolly I can't make that meeting....gotta see the Gunners in action!

by Les Rudd | 9th Dec 10, 9:11am 1291839064

An Arsenal supporter?! Ye Gads man, you poor thing. Oh well, each to their own.

by Kunst | 9th Dec 10, 8:54am 1291838049

Copper production is expected to reach 450,000 tonnes (500,000 short tons) annually. Financing for the project has come in part from the Rio Tinto Group and an investment agreement between Ivanhoe Mines and the government of Mongolia.

http://en.wikipedia.org/wiki/Oyu_Tolgoi_mine

http://www.midasletter.com/index.php/jp-morgan-behind-mysterious-1-billion-copper-buy-on-lme/

Hmm- I guess our “Cooper Wire Man” was right. Wally are some members of the small Mongolian government part of your family ?

by noponies | 9th Dec 10, 10:05am 1291842330

Heres Ambrose http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8187476/Iceland-offers-risky-temptation-for-Ireland-as-recession-ends.html on the differing experiences of Iceland and Ireland. Iceland that didn't bail out the banks at taxpayer expense is doing much better.

by Wolly | 9th Dec 10, 12:51pm 1291852315

"Jim Rogers expects interest rates in the US to go much higher over the next few years"

http://www.telegraph.co.uk/finance/economics/8187875/Jim-Rogers-US-governments-inflation-data-is-a-sham.html

What will that do to rates in NZ?

" 'US government's inflation data is a sham"..........are we also being lied to here in NZ?

by Wolly | 9th Dec 10, 12:57pm 1291852648

"The couple are credited by some as pioneers who helped to create the financial advice industry in New Zealand.

In 1988, Bradley, then known as Jackie O'Neill, published a book called The Winning Woman, which focused on financial advice for women." herald

yep...they sure did!

by Wolly | 9th Dec 10, 4:44pm 1291866286

Hey Gummy, just got a letter from Timmy the Rat...he needs help sorting out some crook $100s and I thought of you straight away...you need good eyesight and a feel for new bills with no flaws...you have to promise to destroy the bad ones and send back the good. You in?

by Gummy Bear Hero | 9th Dec 10, 5:10pm 1291867858

OK , I'm in ......... Having a problem getting the patina right on my last batch of $NZ 37 notes .............. Bloody cheap Fairfax 60 gsm paper wot I stole ....... I reckon I hate cheats and cheapskates ! .......

....... Where's these $US 100's hanging out , Wolly........... In Timmy's garage , or in Bennie's ?

by Wolly | 9th Dec 10, 5:18pm 1291868285

I'll let Timmy the Rat know..expect a few bundles in the post....hey I just got this email from a friend:

This has happened on Barrett Road in New Plymouth..

               Sad, especially if you are inclined to 'help' people...

                      While driving on a rural end of the roadway on Thursday

                      morning, I saw an infant car seat on the side of the

                      road with a blanket draped over it. For whatever

                      reason, I did not stop, even though I had all kinds of

                      thoughts running through my head. But when I got to my

                      destination, I called the Police and they were going

                      to check it out. But, this is what the Police advised

                      even before they went out there to check....

                      "There are several things to be aware of ... gangs and

                      thieves are now plotting different ways to get a person

                      (mostly women)to stop their vehicle and get out of the

                      car.

                      "There is a gang initiation reported by the local

                      Police where gangs are placing a car seat by the

                      road...with a fake baby in

                      it...waiting for a woman, of course, to stop and check

                      on the abandoned baby.

                      "Note that the location of this car seat is usually

                      beside a wooded or grassy (field) area and the person

                      -- woman -- will be dragged into the woods, beaten and

                      raped, and usually left for dead. If it's a man,

                      they're usually beaten and robbed and maybe left for

                      dead, too.

                      DO NOT STOP FOR ANY REASON!!!

                   IF you can..... DIAL 1 1 1

                    AND REPORT WHAT YOU SAW, BUT DON'T EVEN SLOW DOWN.

                      "IF YOU ARE DRIVING AT NIGHT AND EGGS ARE THROWN AT

                      YOUR WINDSCREEN, DO NOT STOP TO CHECK THE CAR, DO NOT

                      OPERATE THE WIPER AND DO NOT SPRAY ANY WATER BECAUSE

                      EGGS MIXED

                      WITH WATER BECOME MILKY AND BLOCK YOUR VISION UP TO

                      92.5%, AND YOU ARE THEN FORCED TO STOP BESIDE THE

                      ROAD AND BECOME A VICTIM OF THESE CRIMINALS.

                       THIS IS A NEW TECHNIQUE USED BY GANGS, SO PLEASE

                       INFORM YOUR FRIENDS AND RELATIVES.

                      THESE ARE DESPERATE TIMES AND THESE ARE UNSAVOURY

                      INDIVIDUALS WHO WILL TAKE DESPERATE MEASURES TO GET

                      WHAT THEY WANT."

by Wolly | 9th Dec 10, 5:34pm 1291869282

"The Government says it will introduce reviewable tenancies for new State tenants and ask community organisations to help with providing more housing, as it struggles with waiting lists for state houses." nbr

This problem would be a good deal less serious had the govt moved two years ago to bring an end to the bubbles...sadly the latest statements from Bollard promise more cheap credit will flow into the bubble for longer...while he expresses a wish that property become affordable, his policies promise the exact opposite because the population remains dead keen on buying and selling property at a time when deposit rates are crap and the NZX listed companies are paying out poor divs.

On top of the ocr damage, we have govt policy feeding a rent subsidy to landlords and allowing landlords to deduct interest on property mortgages as a cost of doing business. The home owner next door does not get this sort of benefit.......and they pay the tax that goes to the landlord.

by Kunst | 9th Dec 10, 9:34pm 1291883660

Man -use your 4WD and other smart guzzler's as much as you can - now. In January/ February 2011 driving for fun is over - rude Crude could be over US$ 110.-

Drive twice to work now, so you compensate and don't have to after New Year and take a taxi going shopping, so he's paying for the price increase - be clever man !

Some infos:

http://www.parliament.nz/en-NZ/ParlSupport/ResearchPapers/4/6/a/00PLEco10041-The-next-oil-shock.htm

http://www.caltex.com/nz/en/fuel_prices.asp

by powerdownkiwi | 9th Dec 10, 9:35pm 1291883756

the firsat one I'd posted here before, but it's a goodie.

Thanks for the Caltex one :

Relentless demand pressure from China and India, fuelling the diesel-powered machinery of economic growth

Ain't that a fact....

by Kunst | 9th Dec 10, 9:46pm 1291884378

Yes pdk - plus the winter cold in the developed world of northern hemisphere countries plus- no I better not say it.

by powerdownkiwi | 9th Dec 10, 9:56pm 1291885014

Yep - those who tend to be tribeless may also be speechless, to say nothing of transportless.

I think something else will happen - Clint Smith touched on it - that every time oil gets to a certain price, we get an instant recession, followed by an attempt to restart, etc etc.

How long that one goes on before the penny drops (ha) is anyone's guess, but I think at some point, there will be a general realisation that debt can't be repaid.

Then it gets interesting.

by Wolly | 10th Dec 10, 6:54am 1291917248

Wake up John Key...the banks are giving you the big finger...time to kick the chair out from beneath them John...time to be a Prime Minister and not a wee toad...smash their bloody property bubbles and do it now.

"The Government has introduced legislation to establish a $1 billion package to fix leaky homes – but has not reached a deal with banks to fund the loans.

Under the bailout scheme the Government and local authorities will finance 50 per cent of repair costs. But the package is dependent on homeowners being able to borrow the rest from their banks.

However, the Government and the Building and Housing Department have yet to agree a deal with the eight main retail banks, which are reluctant to lend against damaged properties without a 100 per cent guarantee from the Government.

"The current proposal falls short of how a guarantee is commonly perceived, in that what's being proposed would not cover 100 per cent of any loss, so it would be more like a loss-sharing arrangement between government and banks," a spokesman for the Bankers Association said."

herald.