David Chaston details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news that the Japanese situation, especially the nuclear situation, is not getting better.
They have a new enormous problem, one they have asked for international assistance with.
Meanwhile, the Bank of Japan has added a quarter of a trillion US dollars into their markets to reassure them. Some say even that may not be enough.
However, assuming the nuclear issue is resolved, the quake is expected to only take of 0.6% from their economy. The yen was pretty stable overnight.
In Europe, the summit there was reportedly a rancorous affair, with the head of the ECB openly attacking the approach of the French and German governments – and loosing the argument.
The European bailout funds have been increased to three quarters of a trillion US dollars, and a new fund established of the same size which will buy bonds directly from governments. The ECB’s huge holdings of previous purchases may have no market now.
However, generally these moves were seen as positive, and the euro rose.
Gold moved back up to where it has been most of the month, oil popped back over $100 again, and the Dow fell slightly.
All these international changes are having a local impact. The latest petrol prices have pushed up to $2.14 per litre, almost as high as the record $2.17 we saw in July 2008.
Remember, this time however, there is much more local tax in the price than back then, with substantial increases in self-imposed excise taxes and GST since 2008.
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"The OBR policy provides for continuity of core banking services to retail customers and businesses, while placing the cost of a bank failure primarily on the bank's shareholders and creditors rather than the taxpayer," deputy governor Grant Spencer said in a statement.
Those who save their money in a bank are the bank's creditors.....haha
wolly - except that those who have their money in a bank are used as a 20:1 fiat lever.
Wait for the move where deposit-holders are held responsible a la Lloyds 'Names'.
You wouldn't just get 0.0003 cents in the dollar back, you'd be liable for 20 on every one you'd banked.
The banks would offer you insurance against such an even, of course..... off-loaded against some Bahamian-registered re.
True enough PDK...wonder how many sheeple realise they stand to kiss bye bye to their bank savings while the 'covered bond' owners get to survive, to go on looting the suckers who borrowed from the dead bank.
Seems to me the wise move is to remove savings from banks....asap.
That's really simple, Speckles.
You buy what you know you're gonna need in the future.
Example - I run my house on a mini-hydro, the generator part of which is a Gentle Annie motor. They're not making Gentle Annies any more, and I want it to still be running in 50 years time.
So I went out and collected 50 motors. At less than $1 each. I have just eliminated any future re-wind costs, re-bearing costs, and I'd already eliminated future power-bills. And I can give/swap/trade a few away to folk not so prepared.
I guess you'd call it physical forward hedging.
It's bizare and/or frightening when you think about it, Speckles. Your "liquid savings" are nothing more than someone else's debt. That's the way our system works and it does work - until it doesn't.
The scary part is the way the total debt has expanded at about double the rate of growth in wages, profits and the size of the total economy generally. Forty years now of 10%+ debt growth having to be serviced by an economy growing at 5% (nominal). How is this sustainable? Ask around (be a good one for a central banker) no one has an adequate answer. The system corrected with the Great Depression - mostly through debt default - it is not possible for the total debt to reduce otherwise - even the great inflation of the late 70's early eighties failed to dent the relentless rise in debt to GDP ratio.
http://www.nonequilibrium.net/240-credit-market-debt/
So how safe is your bank deposit really?
Re: Re - there it goes:
http://www.bloomberg.com/news/2011-03-14/european-stocks-tumble-as-rein…
Getting back to this OBR policy PDK.....yes you had best don a face mask....what is it that Bollard sees coming down the road...I thought it was just a Tsunami of rate hikes...he seems to have used the Hubblescope to spot what looks awfully like a run on a bank....which bank....when?
Wally I'll take the punt and say it starts with a big N.....as the country's largest rural lender and not necessarily underwritten by it's mothership.....as to when....well let us speculate a massive downturn in commodity demand.....errrr like say.... milk solids...?
PDK, the insurance guy's are on the phone to you as we speak ;-)
Global insurers fall on estimated £22bn claims bill Investors pulled out of the world's largest insurance companies yesterday after experts warned the industry could face claims of about $35bn (£22bn) as a result of the devastation in Japan.
the disaster could severely impact UK insurance balance sheets and result in companies turning to shareholders for capital. The Japanese disaster comes just under a month after the New Zealand earthquake, which is expected to cost the industry up to $12bn.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8380422…
AJ - one for you:
Polonius:
Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
Your ref looks like a case of something I used to read to my kids: Not I, Said the Little Red Hen.
Meanwhile, the US Treasury is running out of cash;
Gareth expecting property to fall another 20%....I agree. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10712415
Air NZ - here we go.......
"expect the books to be in the red in the second half, due to fuel prices".
OK,so we have a handle on where the 'business model' hits lee-side rotor, and it's lower than $147, looks like it's $110 or so.
Throttle back and go for 'best LD', boys.
I just had a phone call from family recommending us to buy a “Geiger counter” and some iodine tablets.
I replied we got Marlborough Sav and two containers of Green mussels in the fridge.
Anyway - another example of experts not telling the people/ public/ media the full story ? Time is running out to evacuate millions of people.
Those at greatest risk Walter are stuck on islands in the Pacific east of Japan. Any fallout would reach the US west coast and drift across the whole continent. Perhaps this might be the trigger for an exodus to the southern hemisphere?....Kaikoura has space for at least half a million don't you think.
Kunst
This is just another brilliant example of so-called "Experts" getting it all wrong
For days we have been hearing from so-called experts about how the whole nuclear thing was under control
Now I'm not saying its going to be Chernobyl (although that seems a possibility), but it IS going to be worse than the so-called experts claimed
Like the economists, are they just really bad at their job, or are vested interests at play (in this case it has been mainly nuclear industry people who have been saying it will all be OK)
I suspect a bit of both
The Japan tragedy will have limited impact on NZ's economy - YEAH RIGHT!:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10712531
From zerohedge who have been all over the Fukushima story from the start:
The absolutely worst news: NHK saying radiation up to 400mSv at Reactor #3, 100mSv at Reactor #1...That's milli... not micro, or 250 times the maximum reported prior number. Alas, we believe this means the cores have melted.
http://www.zerohedge.com/article/nikkei-flash-crash-futures-plummet-16-all-hell-breaks-loose-japan
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