90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: States of nation addresses abound; Obama to freeze spending; UK GDP falls; NZ$ up to 48p

26th Jan 11, 8:58am 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 Prime Minister John Key is expected to make a drive to improve national savings the centrepiece of his state of the nation address later today in Auckland.

Key's address follows one yesterday from Labour leader Phil Goff in which he proposed a 'tax free zone' for the first NZ$5,000 of income and a new unspecified tax rate for high income earners. However, he didn't detail how it would be paid for, apart from a generalised crackdown on tax avoidance.

Key attacked Goff for being fiscally irresponsible and warned that New Zealand couldn't afford such profligacy when our credit rating was under threat.

Meanwhile, US President Barack Obama is due to deliver his state of the nation address to Congress, including plans for a freeze on discretionary non-military spending for five years.

In Britain, GDP fell by an unexpected 0.5%, driving the pound down as the government's austerity drive and the impact on consumers of falling house prices hit home.

Economists expected a 0.5% rise.

The New Zealand dollar rose by 1p to 48.4p, although it remains below its record high of 50p from early in January.

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17 Comments

by Andrewj | 26th Jan 11, 9:09am 1295986165

http://www.telegraph.co.uk/finance/globalbusiness/8281897/IMF-chides-US…

"The absence of a credible, medium-term fiscal strategy would eventually drive up US interest rates, which could prove disruptive for global financial markets and for the world economy," it said. The report called for an assault on America's entitlements behemoth, and caps on discretionary spending.

by powerdownkiwi | 26th Jan 11, 9:17am 1295986636

Britain's GDP fall unexpected?

Only if you listened to witchdoctors, Bernard.

Some of us study energy. Without which work doesn't happen.

Track the 'energy-in', and you can track the 'work done'.

Economists expected? Spare me :)

by Rob of the North | 26th Jan 11, 10:18am 1295990302

bored people always turn on their leader !

by andyh | 26th Jan 11, 9:17am 1295986666

'Key attacked Goff for being fiscally irresponsible'.

And yet borrowing $250m a week is somehow fiscally responsible?

Pot.Kettle.Black.

by Andy Rodgers | 26th Jan 11, 3:31pm 1296009073

andyh - I am by no means a Labour sympathiser but your comments are so true.

by scarfie | 26th Jan 11, 9:18am 1295986738

So Britain has gone into negative growth on the back of austerity measures.

Given that we are already negative, then what is going to happen to growth here when the inevitable austerity is implemented?

by Wolly | 26th Jan 11, 9:20am 1295986819

So those in the UK who did not gamble and splurge with other people's money, but instead saved their income however modest, now look upon housing as something they can afford without the need to borrow and they can buy what they need each day without the use of credit and still they will have enough savings to generate extra income. If they have been smart enough they will have placed some of their savings into gold and silver which is likely because they will have understood the BOE and govt policies were destroying the Pound.

Here in NZ the gamble on property is under govt and RB protection...housing is being kept seriously unaffordable...because the banks have absolute control over Bollard and Key's govt. Those who saved are seeing their savings eaten away by the deliberate debasement theft orchestrated by the RBNZ.

The 10% decline in rents in Marlborough and the drop in farmland prices are events seen as a threat to the banks. This deflation is being fought with cheaper credit for longer and covered bond deals, with bank bait adverts aimed at sucker peasants and comments that "lazy balance sheets" are a sign of bad management........

The UK will come through it's recession battered for sure but then the growth there will be far greater than the weak pissant numbers produced down here. And those poor numbers are utterly dependent on China not falling over.

Meanwhile, English is borrowing $50 million a day..day after day...week after week....doh.

by andyh | 26th Jan 11, 9:32am 1295987557

Wolly I would not be so sure that the UK is going to stage any sort of meaningful recovery in the next whenever. Go look at a chart of North Sea oil production and tell me of any nation which could survive the collapse in tax revenue/damage to the balance of payments that the UK is undergoing as a consequence. Then go and look at the liabilities the UK government has racked up on its Private Finance Initiatives. Throw in a housing market that is now starting the second leg down of a death spiral, chuck in a manufacturing base that has withered, and add an imminent energy supply crisis.

by Wolly | 26th Jan 11, 9:27am 1295987226

Goofy has dyed his mop...haven't seen it yet but did he opt for a red tint?....

by Basel Brush III | 26th Jan 11, 9:45am 1295988308

Meanwhile Key admits his is falling out. Not the result of him tearing it out?

This guy gets more and more bland with each appearance. I suspect his "State of the Nation" speech will say nothing but with excess verbiage.

by Wolly | 26th Jan 11, 10:03am 1295989429

It's in his interests to say nothing. He can't really front up and say we are where we were at the end of 08 and the recession is there in front of us as far as we can see. Yes there has been tinkering and tweaking and yes the govt has not broken its promises to wear Clark's red skirts...but so what!

At some point the game has to stop...it may be this will happen when the bond market tells Bernanke to stuff his trickery in his ear...or when Beijing wakes up to a peasant revolt...or when the ECB can no longer bullshit the market and the gargantuan pile of debts blow Trichet away.

Who knows what it will be...but we know the end game is underway right now.

by andyh | 26th Jan 11, 9:56am 1295989018

Meanwhile the US housing market crash part deux is well under way:

http://www.calculatedriskblog.com/2011/01/case-shiller-us-home-prices-k…

Anyone else remember that chap who who was trying to drum up interest here about 6-9 months ago in buying US housing via a fund he claimed he was heavily into?

Guess he is still trying to digest the meaning of 'dead cat bounce'.

by Wolly | 26th Jan 11, 10:07am 1295989663

Guess we will soon see Case-Shiller sharing a seat on the bus to a federal prison with the Wikibloke...threat to national security or some such shit.

by Rob of the North | 26th Jan 11, 10:12am 1295989944

when people get bored , they always attack their leader !

by Vanderlei Luxemburgo | 26th Jan 11, 10:19am 1295990347

not sure how i missed this but the nats conveniently announced they would spend $3m doing up houses in the Ratana area, just prior to the party there the other day:

http://www.nbr.co.nz/article/mps-head-ratana-nn-84167

obviously key and goff both understand that pork makes the puha taste better

by Wolly | 26th Jan 11, 2:14pm 1296004470

This has the overpowering stench of sh--

"Auckland's biggest real estate agent, Barfoot & Thompson, said its offices had received a significant increase in inquiries from would-be buyers in China." herald

by Nicholas Arrand | 26th Jan 11, 2:25pm 1296005130

"There hasn't been an increase in the number of sales, ( Fair enough, Peter. Good to see your keeping track of such things) but certainly the inquiries are starting to come in," said managing director Peter Thompson.

He said he could not say how many properties in the past six months were sold to Chinese nationals because the agency did not keep a record of the nationalities of buyers. ( Hang on! I thought you just stated that you kept track of the numbers, because the 'sales numbers hadn't increased! How do you know, either way, if you don't keep a record?!)