David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that S&P have given the NZ Government a tick for the way it is approaching its 2011 budget, saying that it doubts there is much ‘fat’ in state operating costs. This may be setting the scene to remove the ‘negative watch’ status when the Budget is presented on May 19.
Overseas, inflation is picking up and is looking to be a bigger problem sooner in many big countries in 2011 than thought earlier.
China said its inflation rose from 4.6% in December to 4.9% in January. In the UK, inflation topped 4%. And in the US, policy makers are coming to grips with the problem that their stimulus is unsustainable, inflationary, but holds on to jobs. While the politicians choose the short-term benefits, Fed members are starting to lose faith in the existing policies. They have some very tough choices ahead, and they will affect us all.
In Japan, their central bank has raised its economic assessment for 2011 on better global growth prospects, and higher exports.
But in Europe, fourth quarter growth was much less than expected at just +0.3%. German growth was weather-affected, France’s economy stalled, and the PIIGS are deep in recession.
Such gloom is not affecting some big European banks however. British bank Barclays has reported a 32% rise in profits, although some of that was because they put a lid on staff bonuses.
The Dow is holding up, Gold is up to US1,372 / oz, oil futures are down sharply to US$84.15 / bbl, and the 30 yr Treasury bond yields fell to their lowest level in a week.
The NZ$ is weaker this morning against most currencies. It is currently sitting at 75.26 US cents
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10 Comments
A first?????
A media report using the term "negative growth" - now if only the Councillors and planners can get their head around it!
This includes negative growth - or shrinking employment - in the agriculture, construction, manufacturing and retail sectors.
But alas, not quite yet ready to face up to it:
Overall growth is expected to pick up alongside an expected economic recovery.
"Overall growth is expected to pick up alongside an expected economic recovery".
http://www.postcarbon.org/article/254838-earth-s-limits-why-growth-won-…
The disconnect continues :)
Has anyone seen or heard from Wolly of late. I hope he is OK. I miss his take on life! Cheers
I haven't seen any comments from him for a few days Bobby. Are you out there Wolly?
Oh... he'll be out there Gareth..... it's just that he's working on an invention of a rubber nature..in fact it seems a lot of the usual suspects (myself included) are MIA for various reasons.....................stll.......procrastination is the thief of time........see you soon I hope.
Have enjoyed a lot of your articles...just have no time for input. Cheers
Cheers Christov. I look forward to hearing more about this invention...
........ either that invention , or a Catholic tabernacle somewhere is about to lose the copper sheeting off its roof ........
FYI, Fletcher Building's outlook for housing and infrastructure from the company's interim results announcement this morning:
"In New Zealand, residential house building activity is not expected to improve in the second half given the recent consenting data, however, there have been more encouraging trends seen in commercial construction consents."
"Work on rebuilding Canterbury following the earthquake in September 2010 will accelerate in the second half of the year. The government’s scheme to facilitate the remediation of tens of thousands of leaky homes is now not expected to get underway until the 2012 financial year."
"Infrastructure spending by the government is forecast to be lower this year due to the timing and implementation of larger projects, but based on government estimates, will increase in the 2012 financial year."
http://www.nzx.com/markets/NZSX/FBU/announcements/4663250/FBL-Financial…
Fed members are starting to lose faith in the existing policies
David do you have any fresh links on this (Bernanke seems to be as determined as ever to remain oblivious to what's going on in the world around him)? The reverberations from any change in Fed policy is THE issue confronting the world economy this year.
http://www.zerohedge.com/article/fed-now-boxed-dislocations-ahead-ratchet-effect-stick-slip-and-qe3
Although the Uk inflation numbers are being shoved around by the VAT increase and hikes to Road Taxes, when you take out tax change ( what they call CPI-CT), the numbers are 2.3% annually.
However the 4% is what consumers in the street are going to feel, lowering their standard of living, but it is just not being driven by excess demand due to the BoE's prinitng presses,
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