Stocks plunge again on Euro bank fear

90 seconds at 9 am with BNZ: Euro stocks fall 5% on Euro bank fears; US stocks down sharply too as US economic worries deepen

19th Aug 11, 7:51am 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 the Dow closed down 419 points or 3.7% and the S&P 500 ended 4.4% after a plunge on European stocks overnight.

Market fears about the fallout on European and US bank stocks from the European sovereign debt crisis continue to undermine investor confidence.See more here in Bloomberg's US stock market report.

The Wall St Journal reported that officials from the US Federal Reserve were very concerned about the stability of the US arms of European banks and had launched a full investigation. See the WSJ report here.

The EuroStoxx 50 index fell 5.3% and France's CAC 40 index in France fell 5.4%. Germany's Dax index of stocks fell 5.8%%.

Bank stocks were slammed on worries about a freeze on European money markets as bankers worry about other banks' exposure to European sovereign debt.

A Swedish banking regulator warned that European money markets are vulnerable to freezing up again in the same way they did after the Lehman crisis in 2008. See more here at Bloomberg.

The European Central Bank lent one European bank US$500 million, suggesting the bank was unable to borrow off other banks in the interbank market. This was the first time this had happened in 6 months. See more here at WSJ.

Zerohedge reported the US Federal Reserve lent the Swiss National Bank US$200 million, also opening up its US$ swap lines for the first time since October 2010 and suggesting growing stress in the interbank markets.

Weaker than expected US jobs and factory output figures also hit stock markets hard. Jobless claims rose to 408,000 last week when economists had forecast it would only rise to 400,000. See more here at Bloomberg. Morgan Stanley cut its forecast for global growth this year to 3.9% from 4.2% and said the American economy, the world's largest, was already close to recession. See more here at Bloomberg.

Hopes are also fading the US Federal Reserve will be able to launch a third round of quantitative easing or money printing. This followed news overnight of growing inflation pressures in the United States. Consumer price inflation rose 0.5% in June, more than twice the median economist forecast for 0.2% growth in prices. See more here at Bloomberg.

US consumer confidence fell in August to its lowest levels since the 2009 recession. See more here at Bloomberg.

The gold price sprinted over US$1,829/oz as investors searched for safe havens away from US dollars and Euros. See more here at Reuters.

The oil price fell more than US$4/bbl on fears of slowing US and global economic growth. See more here at Reuters.

The US 10 year Treasury yield fell to 1.97% on market fears of long, grinding slowdown in the US economy. See more here at Bloomberg.

The New Zealand dollar fell almost a cent and a half to 82 USc by early morning as global investors moved away from 'riskier' trades such as the New Zealand dollar.

(Updated with details, links, charts below)

No chart with that title exists.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

75 Comments

by skudiv | 19th Aug 11, 8:03am 1313697803

Why would you buy stocks? Because your kiwisaver fund has to own them, lets make kiwisaver compulsory, and mandatory to invest in the stock market, then we can have news headlines about 'average kiwisaver looses $$$$$ today'. Like they do in the US.

by Bernard Hickey | 19th Aug 11, 8:11am 1313698317

Most KiwiSaver funds are mostly still heavily invested in bonds and cash.

You could argue it's an accident, but still.

cheers

Bernard

by skudiv | 19th Aug 11, 8:21am 1313698901

Cash only dropped by 5.3% in the last year, I just can't see the point in forcing this on people.

by steven | 19th Aug 11, 11:51am 1313711492

Dropped as in actual or dropped as in nominal? I suspect you mean the latter.....and again we look at CPI and not core inflation....its 3.3% when you remove GST to start with....

Need to compare apples with apples.

regards

by skudiv | 19th Aug 11, 12:30pm 1313713822

unless you are taking gst off apples that how much less you can buy with nominal money in real terms.

by andyh | 19th Aug 11, 8:26am 1313699179

I suspect the ones that Amanda has been banging on about (with a 'good' performance over the last 3 years) have a fair bit of equity exposure Bernard. In fact even conservative funds (with a 20% equity exposure) lose meaningful value when markets fall steeply - the returns from their cash and bond components dont compensate for the whacking the equity part takes.Anyway I am looking forward to Amanda's Kiwisaver update once the market's have gone some way to where they are going..........

by Bernard Hickey | 19th Aug 11, 8:35am 1313699714

Andyh

All we're doing is reporting the results of the market performance. You could argue KiwiSavers have been lucky they started saving mostly after the 2008 stock market slump.

Again. We're just reporting what we're seeing.

What is the alternative to investing in stocks long term?

Are you saying we shouldn't have stock markets?

cheers

Bernard

by skudiv | 19th Aug 11, 8:47am 1313700420

Stock markets have changed, with the invention of derivitives and naked short selling. Sharks jumping in and out of the market taking bites out intraday and split second trading. It's nothing like investing its gambling, and picking horses for courses. It's a trough for pigs to get fat before they get slaughtered.

by andyh | 19th Aug 11, 9:09am 1313701758

Bernard:

''You could argue KiwiSavers have been lucky they started saving mostly after the 2008 stock market slump''.

That is precisely what some of us have been saying - yet Amanda has been touting the performance of some funds over a 3 year timesacle as some sort of vindication for Kiwisaver.

Any investment that a) ties you in to a multi-decade committment b) exposes you to the rapacity and incompetence (name me the Kiwisaver funds which have a direct exposure to precious metals?) of the fund management industry and c) relies on a soon too disappear entirely taxpayer funded subsidy as an inducement is a huge malinvestment IMO.

I have been banging on for a considerable time that pension schemes of all stripes that tie your money up for extended periods are going to be financial sink-holes for those concerned.

Quite how you then end up asking me whether or not we should have stock markets is a tad beyond me. Your question should be; will the economic chaos of the next 10 years allow stock markets to survive in anything like their present form?

by Bernard Hickey | 19th Aug 11, 9:15am 1313702111

Andyh

Lay off Amanda. She hasn't argued any vindication for anything. She's just reporting the numbers that are out there.

There are 1.75 million New Zealanders in KiwiSaver with well over NZ$8 billion invested. They need information, comment, analysis. We're doing our best to give them everything we have.

I agree there are problems with stock markets at the moment. They're volatile.

But it's a long stretch to say they are broken forever and that investors never make money out of them (or that companies never use them to grow).

cheers

Bernard

by andyh | 19th Aug 11, 9:35am 1313703333

I am sure Amanda is more than capable of defending her own corner Bernard. Kiwisaver is not short of its one-eyed supporters in this country (Mary Holm springs to mind), so it would be nice if we had a counterbalance to that.

In the not too distant future the wails of anguish surrounding Kiwisaver are going to be something to behold - if you are going to provide 'balanced' comment for the multitude that have signed up then I suggest you start highlighting the negative as well.

by Colin Riden | 19th Aug 11, 9:51am 1313704301

I suspect there is an element of clashing ideologies involved - if not here then certainly elswhere on this site e.g. the argument over obesity and GST on fresh fruit and vegetables.

An extract from Charles Hugh Smith on the subject:

Ideologies are prefabricated boxes. They come with a ready-made self-referential internal logic: B follows from A because I believe in A. Facts are "cherry-picked" to support the internal logic, but the truly key component in any ideology, Left, Right or Libertarian, is magical thinking, i.e. wishful thinking.

I can illustrate this very simply.

The basic assumption of any ideology or "ideological "debate" (quotes explained in a moment) is that all problems would be resolved if only the "other side" came round to your conviction.

So let's follow that through: if all Republicans suddenly agreed with Paul Krugman and Robert Reich, would Peak Everything be resolved? Would the U.S.A.'s dependence on exponentially rising debt and imported oceans of oil magically go away? Would the consequences of The End of Work vanish? Would the consequences of 72 million (or 79 million counting legal immigrants) Baby Boomers retiring, fully 25% of the entire population, magically disappear?

Now repeat the question for the flip-side of the coin: if Democrats suddenly saw the light about free markets, low taxes, etc., and became die-hard Republicans, would any of these structural problems suddenly go away? No.

Though each ideology claims to have the "answers," the "answers" are all magical thinking: if only the wealthy would pay more taxes, if only taxes were lowered, if only those SUV drivers would buy a Prius, if only we cut Pentagon spending, etc. etc. etc. All of these ideology-generated "solutions" are just tweaking the parameters of internally doomed systems.

http://www.oftwominds.com/blogjuly11/random-reflections-7-11.html

by andyh | 19th Aug 11, 9:56am 1313704612

Colin - I am not approaching Kiwisaver from the compulsion side of things (which is a discrete arguement). I am approaching it from the angle of whether anyone (compelled or otherwise) should be locked in to a long term scheme run by the NZ fund management industry.

by Colin Riden | 19th Aug 11, 10:29am 1313706555

Andy, I agree with where you are coming from with Kiwisaver. The information on ideologies was intended to help explain Amanda's side and/or some of the other deeply entrained 'debate' that is going on.

The quality of entrained ideological debates appear to deteriorate markedly in election season. Too many people seem to choose a political party early, and then defend its policies and leadership without further question.

by scarfie | 19th Aug 11, 11:25am 1313709926

I avoid the temptation to slide down that hole by not bothering to vote.

None of them are worth voting for, when you come to that realisation it is quite liberating:)

by skudiv | 19th Aug 11, 9:59am 1313704764

Companies only make money from shares, when they create them out of thin air. This is not that common. It's pretty rare that buying shares on the stock market helps a company grow. Either an ipo or new issue.

by Gummy Bear Hero | 19th Aug 11, 4:47pm 1313729232

Bernard ! ... you agree that stockmarkets are not permanently broken ; investors can make money ; stockmarkets are simply volatile ; and that companies can use them to grow ......

...... ahhhhh , welcome to the light-side , friend . Come , walk with us on the golden path of growth and prosperity .......

What took you so long , we have been waiting for you ......

by Bernard Hickey | 19th Aug 11, 6:45pm 1313736330

Gummy

I've started eating sugary, chewy sweets.

Hmmm

Now where was I ....

cheers

Bernard

by steven | 19th Aug 11, 11:55am 1313711706

I suspect so to.....one of my pensions is a "growth fund" so it took a severe hammering in 2008 but its bounced back quite a bit with this dead cat bounce....but its locked in so I cant go conservative with it.....like bugger...

regards

by steven | 19th Aug 11, 11:52am 1313711556

Looking at the share markets they seem to have been dropping steadily? if slowly...so bonds looks more sensible...

regards

by skudiv | 19th Aug 11, 12:36pm 1313714166

Get the taxpayer guaranteed bonds and deposits (ie go with a to big to fail institute)

by andyh | 19th Aug 11, 8:17am 1313698659

Do lets have some comment from knife catchers united about bargains etc - GBH et al stand up to the plate (again)

by Vera Fayed | 19th Aug 11, 8:22am 1313698943

Oil has really fallen out of bed. WTI down over $6 at one point.

by andyh | 19th Aug 11, 8:33am 1313699580

Yep oil demand tends to fall when their is an incipient global recession. Its gone largely unacknowledged but the rise in oil in the last 9 months is what killed any chance of the US seeing any meaningful recovery. Chalk another recession down to peakoil.

Right so a week or so ago short selling was banned in bits of the European market - result - back to where we were.

What are they going to try next? A blanket ban in shorting across all markets?

by Andy Rodgers | 19th Aug 11, 11:15am 1313709310

andyh - Good point about short-selling. Mish Shedlock pointed out that the European authorities were trying to pin the blame on short sellers. Now that the financial institutions shares have fallen precipitously following the ban proves their allegations to be false.

by steven | 19th Aug 11, 11:59am 1313711976

What they are doing of course is hiding the msg/warning the market is trying to send to them.....fools the lot.

regards

by steven | 19th Aug 11, 11:57am 1313711820

Oil demand or futures? hello $35USD a barrel maybe....

de ja vu....(or whatever)

Peak oil, yep this will just keep happening, like groundhog day until they realise its energy driven....ie we dont have enough, then a real panic.....

regards

by FCM | 19th Aug 11, 8:31am 1313699506

It looks like the smoke is clearing and we are now seeing the true picture from Europe. NZ will be right ,we will have steady growth from the Earthquake and World Cup...Yeah right (make a great Tui ad)

by Andrewj | 19th Aug 11, 8:36am 1313699760

Ilargi summed it up here on the automaticearth

Bank of America:

+7.93% Aug 15, but -22.4% in past month, -34.95% in past 3 months
Citigroup:

+4.76% Aug 15, but -18.53% in past month, -24.71% in past 3 months
Morgan Stanley:

+6.10% Aug 15, but -15.03% in past month, -25.74% in past 3 months
Goldman Sachs:

+2.28% Aug 15, but -8.28% in past month, -15.79% in past 3 months
Société Générale:

+2.06% Aug 15, but -28.53% in past month, -41.23% in past 3 months

http://theautomaticearth.blogspot.com/

by steven | 19th Aug 11, 12:35pm 1313714100

SG is down 12%+ again....roller coaster or what....BofA down 6%....etc.etc.....Barclays down nearly 9%....Glad I dont own shares right now....

regards

by Andrewj | 19th Aug 11, 8:40am 1313700000

Here's Ambrose

20.55 Back to the headline act of tonight's show - the global debt crisis. International Business Editor Ambrose Evans-Pritchard on today's market shenanigans, and a US Treasury first:

Panic flight to safety has pushed the yield on 10-year US Treasuries below 2pc for the first time in American history, exceeding the extremes of the Lehman crisis and the banking crash of the 1930s.

Investors scrambled to buy the bonds of strongest industrial states on Thursday on fears of a double-dip recession on both sides of the Atlantic and a European banking crash, driving down their returns to investors. German yields fell to 2.08pc and Switzerland's 3-month rates have turned deeply negative.

Markets were stunned by a plunge in the manufacturing index of the Philadelphia Federal Reserve to minus 30.7 in August from plus 3.2 in July, one of the most violent falls ever recorded.

"It is a catastrophic collapse," said Rob Carnell from ING. "Markets are in a fearful state right now, and data like this gives them plenty of excuses to panic."

Andrew Roberts, credit strategist at RBS, said investors are haunted by fears that European banks may have lost full access to America's $7 trillion markets, leaving them at imminent risk of a dollar squeeze.

An unidentified European lender had to tap $500m from the European Central Bank's (ECB) swap line with the Federal Reserve, indicating that it had been shut out of the markets. US investors have brought down the guillotine since the EMU debt crisis spread to Italy and Spain, and Germany vetoed any form of eurobonds or fiscal union.

by neco | 19th Aug 11, 8:52am 1313700720

An unidentified European lender had to tap $500m from the European Central Bank's (ECB) swap line

Société Générale (sans doute)

by steven | 19th Aug 11, 12:38pm 1313714315

Or Unicredito, or Barclays, etc take your pick....

regards

by John Kelly | 19th Aug 11, 1:18pm 1313716713

Could it be a bank outside the eurozone?

by skudiv | 19th Aug 11, 8:39am 1313699979

Time for Bernanke to get out of bed and do his cheerleader act again.

by Andrewj | 19th Aug 11, 8:45am 1313700300

Jonlivesey

When investors panic like this, and there are big moves, I think you have to conclude that they think they see big changes coming.    They think the Banking system is toast, especially in Europe.   They think their money is not safe in equities, but will be safe in US Treasuries and Gold.

But panic can go both ways.   If after a further drop investors perceive equities to be under-priced, money could flow out of Gold and Treasuries not quite as fast as it flowed in.   The last investors to get into Treasuries and Gold will be badly hurt.

Investors think German and UK debt is safe and the rest of the EU is on a gradient from less safe for France, to disaster on the periphery.   Even Spanish and Italian yields are rising once more, despite the best efforts of the ECB.   In fact, the "big picture" here is that investors are no longer trading the Euro-zone as one thing, but as separate countries.

And I have been saying for a while now that if you ignore the rhetoric and just watch how Germany actually behaves, Germany is saying that if the Euro-zone survives, that's fine, but they aren't going to cripple German credit-worthiness in a vain attempt to keep it together.   I think the action in Bonds shows that investors approve of that, since they are once more buying one "end" of the Euro-zone and selling the other "end".

by Curious | 19th Aug 11, 11:23am 1313709784

Andrew I have to reply to this as it irritates me every time I see comments about investors selling because they............. whatever reason you want to give. The reality is in secondary markets for every seller you need a buyer so who is the investor the seller or the buyer who presumeably sees some value in what they are purchasing?

Perhaps markets would be less volatile if the media reports were along the following lines.

" Markets drop as astute buyers pick up bargains from panicked sellers"

or as I think it was Warren Buffet who said something along the lines of" Financial markets are the mechanism whereby wealth is transferred from the impatient to the patient"

by andyh | 19th Aug 11, 11:45am 1313711131

The US S+P 500 is 400 points below where it was in 2007 (20% plus down):

http://www.bloomberg.com/apps/quote?ticker=SPX:IND

Its 300 points (15% plus) down from its peak in 2000

http://moneycentral.msn.com/investor/charts/chartdl.aspx?symbol=%24INX&…

I could repeat the excercise with practically any major share index you care to mention. And all that taking place while the Fed threw the kitchen sink at trying to boost the share market. By the way anyone notice that head and shoulders (we aint talking shampoo)?

Tell me again about 'impatient versus patient' and 'buy to hold' ?

by Andrewj | 19th Aug 11, 12:27pm 1313713620

http://www.citywire.co.uk/wealth-manager/five-charts-that-show-the-worlds-markets-are-about-to-nosedive/a516676?ref=wealth-manager-latest-news-list#i=2

by andyh | 19th Aug 11, 12:32pm 1313713951

Thanks Andrewj for that link. I am by no means a chartist but there are a heck of a lot of investors/financial organizations that are - plenty enough to reinforce a trend when they see it in their chart analysis.

by Curious | 19th Aug 11, 3:47pm 1313725639

Andy I don't really want to get into a debate over this, but if you just buy and hold at the indices chock full of wnderful companies like the insolvent US banks then of course you are going to come unstuck. However there are plenty of good companies, paying dividends and with minimal levels of debt that have done well over the time frames you outline. Sure good companies get trashed during market panics but that is precisely when the more astute investors like Gummy pounce.

Oh and I washed my hair this morning thanks.

by Bernard Hickey | 19th Aug 11, 6:48pm 1313736524

Andyh

How long a time horizon is long enough to judge an entire type of asset class a failure?

10 years?

20 years?

30 years?

cheers

Bernard

by steven | 19th Aug 11, 12:45pm 1313714736

As you say there is a buyer for every seller, normally...

So if Im selling, presumably with no buyers the bids go down? what if the ECB is stepping in and buying because no one (private) else will?

So the interesting thing is to break out who the sellers are and who the buyers are...otherwise you dont really know if its meltdown and the central banks are propping as Andrew says or indeed its fear v greed......for the former its a huge worry, for the latter its no real concern.

regards

by Curious | 19th Aug 11, 3:52pm 1313725931

Good point. I was more focussed on shares which the ECB as far as I know doesn't have a mandate to buy. Bonds are another story and it is likely that ECB buying of Italian debt that is keeping the bond vigalantes at bay.

by David George | 19th Aug 11, 8:49am 1313700569

Seeing the falling bond yields, I wonder if John Key's optimisim might have been a mistake. Didn't they just sign up for a heap of future loans with the expectation that yields were on the way up?

The Aussie mid range bonds are down 13 basis points overnight and (basket case) UK 10 year @ 3.75%.

We've heard this was coming from Hugh Hendry for some time now.

http://www.youtube.com/watch?v=cQjD2sw_eg4&feature=related

by Andy Rodgers | 19th Aug 11, 11:27am 1313710020

KD - I have not been following UK bond yields and was amazed at their !0 year yield. Who would lend to the UK Govt for 10 years and only require a 3.75% yield? Disclosure of interest, I am a POM by birth and as such believe that the economic future of the UK is as bleak as anywhere in the OECD.

by steven | 19th Aug 11, 12:55pm 1313715306

HH, Old piece, but a cracker, I think he's a great watch/read....add in the latest Roubini piece

http://online.wsj.com/video/roubini-warns-of-global-recession-risk/C036B113-6D5F-4524-A5AF-DF2F3E2F8735.html?mod=WSJ_hpp_mpvidcar_1

on move to cash and you have to wonder why ppl see hyper-inflation while (the ppl I think at least are the better thinkers) say a depression risk is dominant...

regards

by Andrewj | 19th Aug 11, 8:51am 1313700681

http://www.zerohedge.com/contributed/fed-will-soon-find-itself-snbs-sho…

by steven | 19th Aug 11, 12:57pm 1313715435

Wow he's pretty sure....great thanks.

regards

by Andrewj | 19th Aug 11, 9:34am 1313703240

The Depression And Choice Corner Is NOW (Philly Fed)

http://market-ticker.org/akcs-www?post=192518

by Andrewj | 19th Aug 11, 9:37am 1313703420

Four more eurozone countries ask Greece for collateral

The Netherlands, Slovenia, Slovakia and Austria want same terms as Finland

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_18/08/2011_402779

by Rob of the North | 19th Aug 11, 9:56am 1313704616

Since the GFC in 08 i've made good money cherry-picking stocks on the downs and selling on the ups but i'm out of the market now and have been selling down some over-exposure on bonds with reputable companies.

fortunately i bought in to top end Oz gold stocks like Newcrest in '04 so they can be my buffer....don't hold physical gold.

Despite the fact that gold has soared more than 500% during the last decade, most professional investors still refuse to embrace it as a respectable asset class.

Gold is like a prostitute that becomes a brain surgeon. No matter how accomplished a surgeon she may become, most folks will still consider her a hooker, not a doctor.

That’s unfortunate, especially if you happen to need brain surgery.

Right now, the entire world needs a kind of monetary brain surgery. Gold can handle the job. So don’t let her skin-tight spandex shorts and her stiletto pumps fool you; this gal can do things with investment capital and personal savings that paper currencies can only dream about....even some of the old financial curmudgeons that tyrawl and monopolise this site could do to pay heed ??!!

by Nicholas Arrand | 19th Aug 11, 10:18am 1313705907

Trouble is, Rob, that having escaped a near fatal labotomy last time, it's hard to trust the surgeon this time around ( because this time it's different). Sometimes it's easier to wish those who are about to have a first- time operation, luck; hope they heal, do well.

by Christov | 19th Aug 11, 10:40am 1313707257

yep ...last time it left me smarting a lot too Nicholas....but I get what Robs saying ..I feel like a commuter watching buses come and go.....standing in the rain... to apprehensive to get on cause they look so damn full....but they keep going n I'm getting wet here.

by scarfie | 19th Aug 11, 11:34am 1313710495

Haha.

Well I publicised my move two weeks ago and got out of the rain.

Forget about it in $ terms, it purchasing power that counts. For me I will be looking for troy ounces per acre:)

by Christov | 19th Aug 11, 1:04pm 1313715870

good on you scarfie...! hope it all goes well.

by Gummy Bear Hero | 19th Aug 11, 1:17pm 1313716656

Gummie's Book of the Week : Just finished reading " The Little Book of Sideways Markets " by Vitaliy Katsenelson . ... Sub-title , " How to make money in markets that go nowhere ."

.. highly recommend it to any stockmarket investor . The author argues that markets trend sideways for long periods , 16 to 20 years at a stretch , before resuming a secular bull market upwards , of equal duration . He believes that the current crawl-sideways market will endure until 2020 .

But , he offers excellent advice on how to profit by active management of a portfolio of company shares , within the sideways market period .

by Christov | 19th Aug 11, 1:19pm 1313716768

Ta GBH ..I'll be sure to get my hands on it...n look for some recovery strategy.

by Gummy Bear Hero | 19th Aug 11, 1:29pm 1313717366

Got my copy through Amazon , Count .

... near the end of the wee book he predicts a horrific hyper-inflation for Japan's future . So damn scarey that I nearly shat my sumo-sized gummy nappies .

by Christov | 19th Aug 11, 1:36pm 1313717771

On order now...read the preview...thanks again.

by scarfie | 19th Aug 11, 1:23pm 1313717015

Did you see that Dow Jones chart linked to the other day? The inflation adjusted one?

What did it take to permanently establish above the 1906 peak, something like 50 years.

But that sounds like a good read, although I am picking there is a new game in town.

by Gummy Bear Hero | 19th Aug 11, 1:33pm 1313717588

Take a pinch of salt when looking at those charts , they usually don't include dividend returns . An accumulation index allows for compounded returns by assuming re-investment of divvies . The charts look alot healthier when calculated as total returns .

by Christov | 19th Aug 11, 1:34pm 1313717657

Now don't you go all Market Oracle on us scarfie...it's good that you caught the right bus...it's where you get off that's in question.

by scarfie | 19th Aug 11, 1:40pm 1313718015

Reminds me of that card game I used to play as a kid, 'Stop the Bus'.

Shame I can't back the bus up eh?

On the Oracle thing, I think PDK is on to it. I don't think there is too much doubt of the correlation between GDP and energy consumption. You can only hope he is wrong about oil but in the end he won't be wrong, just delayed a bit.

by andyh | 19th Aug 11, 1:35pm 1313717709

GBH - did the book have an appendix on how to make money in falling markets as well? I suspect thats the bit you need to be reading. Trouble is the b*ggers will soon ban all shorting so not even that option will be a money earner..........

by Gummy Bear Hero | 19th Aug 11, 1:47pm 1313718474

andyh : No appendix needed in a ruptured market . Collect big fat dividends from your companies . And when some shares get over-valued , have the presence of mind to sell them , ignoring any emotional attachment . ... as we have witnessed through the GFC , even within a sideways markets , cyclical bear & bull markets occur . But these are not portents of a new secular bull market .

Repeat after Gummy : " collect the dividends , collect the dividends ... "

[ .. Gummy doesn't do derivatives ; when you're only 150 cm tall , words 'like " shorting " are already banned .. ]

by Wolly | 19th Aug 11, 10:16am 1313705796

Crikey..heaps of feathers flying on here today...

The world will not stop needing stuff...we supply stuff like that...our exports will stand any test in the markets, so long as the govt doesn't bugger it up with stupid deals with Obama.

Our greatest threats come from useless govt....govt too gutless to cut its own expenditure.

The other threat comes from the banks as they push to sell credit to more fools.

by scarfie | 19th Aug 11, 11:32am 1313710377

Maybe the deal with Obama isn't the better evil?

Raped by America or invaded by China?

by Wolly | 19th Aug 11, 12:06pm 1313712413

Where to from here.....bigger lies from govts...fatter pay and bonuses for bank bosses...orchestrated BS from the media soap opera...more main street sales...but hey things could be much worse...Labour might have won in 08...how you like them apples!

by Rob of the North | 19th Aug 11, 12:17pm 1313713066

yep...there are always some certainties in life , Wolly, including your high-rotate waffle !

by Wolly | 19th Aug 11, 12:23pm 1313713403

Hope you're paying tax on those trading gains you say you made since 08 Rob....!

by Rob of the North | 19th Aug 11, 12:59pm 1313715593

of course,wolly!...how else are you going to get your pension bludge paid for?

by Gareth Vaughan | 19th Aug 11, 12:28pm 1313713702

Good news for Fletcher Building:

"Fletcher Building is very pleased to announce that its subsidiary, Fletcher Construction, is part of the consortium that has been awarded the contract for the Waterview connection tunnels and Great North Road interchange in Auckland.

Fletcher Construction has a 32 percent share of the “Well Connected Consortium”, with McConnell Dowell, Obayashi Corporation and three design companies, Beca, Parsons Brinkerhoff and Tonkin and Taylor taking the remaining 16 percent.

The project has an expected design and construction cost of approximately $1.3 billion and is expected to be completed over the next five years.

The Well Connected Consortium will form an Alliance with the New Zealand Transport Agency to deliver the project on behalf of the New Zealand Government. The selection of the preferred consortium has been through a competitive process involving a combination of price and non-price attributes and the whole selection process has taken more than a year.

The project involves two parallel tunnels under Avondale Heights that are each 13.1m in diameter and 2.4km long. The existing interchange at Waterview will be reconfigured with extra connectivity.

The scheme involves several road and pedestrian bridges as well as considerable amounts of landscaping, environmental mitigation and a number of community assets."

by Andrewj | 19th Aug 11, 5:56pm 1313733409

Iain, its all about those connections. If it helps a lot of us who make stuff and grow stuff are getting pretty pissed with the letchs taking the cream off us in every thing we do. Their days are numbered as your message gets out.

by Andrewj | 19th Aug 11, 6:00pm 1313733653

12 desciples was all it took to make a huge difference to the world we live in.