Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the Republican-dominated lower house of Representatives is set to vote on a budget deficit reduction plan later this morning.
Markets are watching the results of the vote closely, although the outcome is no sure thing given a revolt by Tea Party Republicans against the plan in recent days.
However, even if that plan does succeed in the lower house, the Democratic-dominated upper house has vowed to reject the bill and Barack Obama is opposed to it because it does not include tax increases. See more here on the Congressional dramas at CNN.
Congressional leaders are again set to burn the midnight oil through the weekend in an increasingly desperate attempt to find a deal to raise America's debt ceiling before the August 2 deadline, which is Wednesday morning New Zealand time.
Meanwhile, the US Treasury has devised a plan to ensure that interest payments are prioritised after August 2 so America does not default, but that may mean other payments such as social security or payments to contractors are not made. See more here at Bloomberg.
The Dow closed down more than 0.5%, adding to its slump on Wednesday night. See more here at Bloomberg.
The New Zealand dollar also fell as nervousness on global markets rose, meaning some investors removed some of their 'riskier' bets from the table. It dipped below 87 USc, but is well supported as the US dollar weakness took it to post-war lows against the Yen and Swiss Franc. See more here on the weak US dollar at Bloomberg.
Ironically, that meant stronger demand for safe haven assets such as US Treasuries, which are the very securities most at risk of a US default.
Go figure, as the Americans say.
The US 10 year Treasury yield fell 3 basis points to a 1 month low of 2.96%. See more here at Bloomberg.
Although, the cost of insuring these bonds on Credit Default Swap markets rose again overnight.This cost to insure US sovereign debt is now slightly below the cost of insuring NZ sovereign debt, even though New Zealand's credit rating at AA+ is still below America's AAA rating, although that rating is now seen in danger of being downgraded.
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Will it ever end ?
The Looting Of America: The Federal Reserve Made $16 Trillion In Secret Loans To Their Bankster Friends.
……Diamond himself seemed to blush – metaphorically – by accepting a bonus of "only" £6.5m; the board had been prepared to offer him £9m-£10m. Jolly decent of you, Bob, but how about……..
http://www.guardian.co.uk/business/2011/mar/07/barclays-executive-bonuses
Top five bankers at RBS earn total of £20m
http://www.guardian.co.uk/business/2011/mar/17/rbs-top-five-paid-twenty-million
Read some stories – unbelievable !!!!!!
http://swissbankbillionaires.490305.free-press-release.com/
Capitalistic societies at it’s best – well it failed. When are western societies reform for better, honest and fairer solutions ?
Do we really need people on the streets revolting – risking riots – initiating civil wars or worse ?
Looking into current developments on many fronts – the world will never recover again, simply because among the powerful in societies ethic and moral requirements and standards don’t prevail.
http://www.telegraph.co.uk/finance/financialcrisis/8667986/Eurozone-cri…
jonlivesey
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The main thing that amazes me about the Europeans is that they have proved that no matter what they said, they really never understood the process of contagion. They talked about contagion, and they said they were working to prevent it from happening, but I think that they were using the word "contagion" in order to sound professional rather than because they understood what it meant.
Of course, we get this all the time in comments. Many posters here throw words and phrases around that they have read, in the hope that they will be mistaken for experts. I see that "the other side of the trade" is a popular one this morning. I wonder where people learned to parrot that one - zero hedge, most likely.
But contagion isn't just a wiseacre word. It is the process that goes all the way back to the first sign of trouble in Greece. And in the Thirties it went all the way back to over-leveraged Central European Banks, and when it blew up, it went on for nearly a decade.
Contagion means one Bank getting into trouble, and that spilling over into a Bank that was "near" to getting into trouble, who holds the debt of the Bank in trouble, and then the Banks who held the debt f the second Bank, and so on. And now we are seeing this blowing up on the scale of entire Banking systems, not individual Banks.
This was predictable three years ago, and in fact I predicted it, as did several other people. I see what's happening today as the outcome of a deleveraging and contagion process which began three years ago, and which was inevitable, and only whose details were in doubt.
The idiots who didn't see this coming are the ones scratching around for conspiracy theories to explain it. The idiots are the ones going on about "financial terrorism" when in fact they should be asking themselves why they are so stupid that they didn't see the train wreck as it happened.
If you think that this is some kind of conspiracy, them you simply have not been paying attention for the past three years.
rc - there's going to be a lot of that style of denigration about.
Concurrently we have what were (they don't quite know what's hit them yet) powerful business lobbies, who will do/say anything on behalf of their bottom line.
Then there are the spinners from the likes of the National Party - who will do anything on behalf of keeping power.
They're all marked with the same pattern - attempts to slur/denigrate, to throw enough mud that some will stick - and they're all short on science or fact.
They all - unlike the 'green movement' (if you want to call it that) have vested interests.
I prefer science, and math.
http://physics.ucsd.edu/do-the-math/2011/07/can-economic-growth-last/
There are truths. and there is spin. I guess it depends on your conscience which you go for.
He is right on one level though PDK, that when power is centralised it is usually abused. I don't know that the green movement is any different in that regard. I have seen it with Paul Watson, and Sue Bradfords anti-smacking bill spring to mind.
Iain Parker faces the same problem with his argument. Fundamentally he is right, but who has the control?
De-centralised is perhaps a better model, although I wouldn't bet on that either. Lol.
Scarfie - yes, absolutely depends on the benign-ness of your leadership, whatever the model.
Watson I admire as someone who chose to limit his efforts to something achieveable, and has given it everything. Ultimately, saving whales and/or exposing the character-flaws involved, isn't enough, but it's a legitimate start. Me, I'm for non-voilence - 40,000 person marches that force Prime Ministers to suddenly be in Afghanistan, are my style.
Bradford isn't wasn't a green. Period. She was a social equaliser - which is something entirly different, and as devastating to the planet as corporate greed; it might just take one more doubling-time to get there, being not quite so organised.
I suspect society will either descend in Mad-Max style, or if it stays coherent, will indeed fragmentise in co-operative manner (the internet is the perfect model).
All good leadership requires 50% plus of a society to understand that survival depends on altruism, though, and the paradox is that those wo don't are likely to reproduce more.......so your 50% gets less and less attainable.....
Amongst the large cast of idiots that got the world to this point, one has to question the credit ratings agencies. Like most of the bean counter/finacial wizards, they are great at looking backwards and telling us what is bloody obvious because it has already happened or just about to happen. I would of thought if they are to be of any use at all, their analysis and advice would be directed to looking well into the future and giving warnings before problems become critical. What is the use of downgrading the US debt after they have defaulted. You would want that information in time to withdraw your funds before default. Much the same comments could be directed at them re the doubtful bank positions before the GFC. With a bit of forewarning, may be some people would have taken note and taken some corrective actions before we reach these crises.
Ah, now we're getting to see the real intellect.
Stunning.
I repeat the quetion: What is the EROEI of lignite at mine mouth, and while you're at it, what is the EROEI required to support BAU?
It's straight-out physics, nothing to do with attempted typecasting/smear tactics.
The difference between us seems to be that I'm prepared to learn.
A debate with a denier? all this does is give air time to a raving loon who can lie his face off? whats the point?
If you want a real debate the debate should be amongst scientists or against scientists. Pollies are risk managers, you give them the information and they decide the course society or the Nation will stear.
The information is out there, ppl can go read the real AGW science or the pseudo-science and mumbo jumbo that is the denier side....really in mainstream the argument is over AGW is happening the only argument is how bad and how fast....and every year its looking worse and faster.....
regards
http://richardheinberg.com/196-coal-and-climate
We tend to spot 'paid spindoctors with no moral fortitude'.
And prefer to stick to facts, logic, that kind of thing.
FYI Republicans have delayed their vote because they can't get support from their own side.
What a mess
http://www.reuters.com/article/2011/07/28/us-usa-debt-idUSTRE7646S62011…
USdebt ceiling – so when one is without clothes – means he’s naked - but nicely dressed in 1 warm sock one isn’t naked anymore ? Okay ?
Yeah, but then probably it depends where one put the sock over on the right, the left or even better the middle “foot” – but it depends how long it lasts – ohhh boy - big, potential, wonderful America you are still so, so different from any other nation – naked.
Why not in stead put a big sock over your head down to the chin ?
Societies are at risk.
Currently the worldwide destruction of wealth is of unprecedented scale and will literary lead into a new recession far worse then the previous one. Next to worldwide climate change, natural disasters, social and political problems the accumulation and acceleration of events reaches a dangers level never seen in such a form before in human history. Societies are at risk, because inequality breeds frustration and as a consequence wars among social classes.
Funny....so AGW isnt a big problem....yet give it 150 years and we are extinct, that to me is a big problem, like is there a bigger one?
and he misses a bigger risk to society that is here right now, energy constraint, its not happened in 150 years....so we have no experience on how bad and how long this will go on for....about the only examples is Germany in WW2 and SA in apartite where they had to convert coal to oil....neither ended well for the participants.
regards
and if you look at each case we have had or can have a risk strategy to deal with it.
Volcano, if that much ash got out, we'd starve inside 2 years there wouldnt be the sunlight to produce food. So in this case after consideration, we ignore the risk/impact, there is no practical mitigation, oh and I wouldnt bother with [re-]insurance as well....nobody to collect off.
Some things you can do nothing about, again risk management....Identify the problem, quantify it, qualify it and decide what you are going to do about it, eliminate, mitigate or even ignore.
Nuclear / bio war, well we have diplomacy, its how we mitigate.
Aids, well educate, abstination, hand out condoms, thats mitigation.
regards
Well here we go with another week of stupendous bullshit spewing from politicians especially in the you ess ay.... http://www.marketoracle.co.uk/Article29583.html QED recession continues and give it time....give it a week or two....yes the bloody idiots will be back with claims that greater deficit splurging will creat a vibrant growing economy...doh
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