Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, includuing news Moody's has downgraded Ireland's sovereign credit rating to junk.
It now joins Portugal and Greece as nations inside the Eurozone with junk credit ratings. See more here at Bloomberg.
This took the gloss off something of a recovery overnight on global markets. The Dow closed down 0.5%, having earlier been stronger on talk the US Federal Reserve may choose to add more stimulus to the world's largest economy to try to get it going again.
Minutes from the Federal Open Markets Committee (FOMC) meeting from last month showed the Fed discussing options for more stimulus and not ruling out a third round of money printing or quantitative easing known as QE III. See more here at Reuters.
Also pulling down on markets was a poor result from global aluminium giant Alcoa, which reported weaker than expected profits. It is the first of the corporate reporting season and is closely watched. See more here at Bloomberg.
Meanwhile, Italian bond yields fell slightly overnight, recovering a little after Monday's rout.
Prime Minister Silvio Berlusconi pledged to push through an austerity plan faster than initially expected to try to calm down markets, which now fear a spread of the European sovereign debt rot from Portugal, Ireland, Greece and Spain (PIGS) to Italy. See more here at NYTimes.
Meanwhile, the New Zealand dollar fell the most of the most heavily traded currencies overnight, hitting an overnight low of 81.1 USc. The New Zealand dollar tends to rise and fall the most in line with perceptions of risk on global markets, given it is seen as a commodity linked currency and commodities are the most volatile assets when expectations of global growth change. This is seen as the 'risk on' and 'risk off' trade.
The New Zealand dollar had been as high as 83.8 USc on Monday and risk has definitely been taken off the table in the last two days.
The euro remained weak on fears about contagion in the European debt markets. See more here at Bloomberg.
No chart with that title exists.
19 Comments
A cracker from Charles Hugh-Smith
What he doesn't cover in that article is the conditions of commercial leases, which are generally much tougher than residential in terms of the guarantee of the term and the payments.
Unless you are clever, even if your business folds your are still often left with the personal obligation of the lease payments. No hiding behind limited liability there.
What are the downstream effects of that when you still have assets ie: a family home.
But it is whats happening in Agriculture, from animal id through to permits to farm, its all happening here. We have to sit an exam to use drenchs we need a licence to drive a quad bike and it goes on and on.
Yeah i know what you mean. I have posted before about the compliance BS hoops I would have to jump through to get my invention compliant. Worst for me is the cost of that compliance, which is prohibitive to the point that it won't happen. I am at least sort of lucky I can work in the grey areas, but it doesn't really smooth the way.
It is not that my product doesn't have world wide potential, only every wood burner.
But for me, if I was going to outlay the major expense involved in compliance, why would I do it here when I could do it in the US. Same cost but 50 x the market to recoup that cost. It then begs the question as to why I would have the business based in NZ.
CHS provides a great description of the true problem with the US economy, and it is no better in NZ.
Rob of the North posted some positive info on Italy yesterday, I wonder how that information compares with that available on this chart. http://blog.thomsonreuters.com/index.php/euro-zone-crisis-focus-on-italy/
A bit off topic, but a good piece on Libya/Gadaffi anyway. Meaty stuff is at the end.
The result is that wars against them take a long time and kill a lot of people, and they are singularly indifferent to the suffering they cause. Threatening them with a trial simply closes off political options to end the war. It also strips countries of their sovereign right to craft non-judicial, political solutions to their national problems. The dictator and his followers have no reason to negotiate and no reason to capitulate. They are forced to continue a war that could have ended earlier and allowed those who would have died the opportunity to live.
He asks the interesting question of what would have happened in South Africa if there had been the risk of prosection to the white rulers.
"Rod Petricevic was delivered a sharp lesson in the High Court at Auckland yesterday that justice will be served in the Bridgecorp trial irrespective of whether he says he can afford it or not." ,,,,,Fran O'Sullivan
Roast Rod is on the menu!
And as small businesses struggle the big ones get this treatment
Murdoch's News Corp Generated $10.4 Billion Profits And Received $4.8 Billion In "Taxes" From The IRS
By Tyler Durden
http://www.zerohedge.com/article/over-past-4-years-news-corp-generated-…
Big business helps writes the legislation & heavily influences it , so really it's no surprise sadly. Money talks !
Big business destroys jobs Marty. Labour is the biggest cost to most companies, so the attack on it continues. Spun employment figures globally only help support the lies that business create jobs that benefit society in a meaningful ethical way.
It's the demand for the resource that creates the demand for the labour.
It can be driven by any ideology.
You should read Nevil (Shute) Norway's 'Slide Rule'.
Thanks PDK just downloaded it onto my Kindle, thats got to be at least an energy saving, compared to buying the book?
When time comes to address Italy's debt, "haircut" won't be an appropriate metaphor. It’ll be more like putting their heads through a lawnmower, and without anaesthetics.
http://theautomaticearth.blogspot.com/
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/86334…
Europe steps back from the abyss, for a day
The European Union has reached "crunch time" in the words of George Papandreou, Greece's despondent premier. Its leaders can longer allow themselves the luxury of "indecisiveness, errors and tactical politics" as the debt crisis engulfs 40pc of the eurozone's economy and almost half its population.
"Let us be clear: if there is no relief we are going straight into the abyss," said Romano Prodi, Italy's ex-premier and former head of the European Commission.
Relief came just in the nick of time at 9.15 on Tuesday morning when somebody – most likely the European Central Bank (ECB) – intervened in the Spanish and Italian debt markets. Systemic contagion has been halted. A global crash has been averted. At least for a day.
Mind you don't step in the stuff left by junk piigs. It will make you very Moody.
hey wol i've seen you banter the $5bn figure about as Treasury's budget. Are you serious about that? what does that $5b comprise?
"Europe Readies for the Worst"
http://online.wsj.com/article/SB10001424052702304584404576442402737685830.html
are you ready for the fallout!
"We continue to believe that core Europe will end up bailing out peripheral Europe as the cost of not doing so is at least double the cost of doing so," Credit Suisse analysts said in a research note on Tuesday.
Continue to believe...........
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