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90 seconds at 9 am with BNZ: Gold falls more than US$100/oz in biggest fall since March 2008; Dow up 1.3% on slightly better US data; Greek fear returns

90 seconds at 9 am with BNZ: Gold falls more than US$100/oz in biggest fall since March 2008; Dow up 1.3% on slightly better US data; Greek fear returns

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the gold price fell more than US$100/oz or 4% overnight as some investors wondered whether it had risen so fast it was in bubble territory.

The gold price fell in late New York trade to US$1,757/oz, its biggest fall since March 2008, which was before the Lehman Brothers crisis of September 2008. Earlier this week it rose to well over US$1,900/oz and seemed destined for more than US$2,000/oz.

Some are also worried that US Federal Reserve Ben Bernanke may not unveil a fresh round of money printing on Friday as forecast earlier in the week.  More money printing devalues the US dollar and makes gold more attractive. See more here at Reuters.

The Dow and the S&P 500 indices for US stocks closed up 1.3% after better than expected US economic data. See more here at Bloomberg.

US durable goods orders rose 4% in July because of a surge in demand for cars and aircraft. This was more than expected. See more here at Bloomberg.

Also, US house prices fell 'only' 5.9% in the June quarter from a year earlier, but prices in June rose 0.9% from May, which was more than expected. See more here at Bloomberg.

In Asia, Moody's cut Japan's sovereign credit rating because its economy continues to be mired in recession and public debts continue to rise to very high levels while politicians dither. See more here at Reuters.

The Nikkei also fell despite the announcement of a US$100 billion fund to try to control the rise in the yen, which is hitting many Japanese exporters. See more here at Bloomberg.

In Europe, markets are again worried about the latest bailout plan for Greece. The 2 year bond yield in Greece rose to a record high 44% as it emerged Finland had done a side deal with Greece to agree to its bailout and may reject the bailout plan.

Also, there are renewed fears about the political heat German Chancellore Angela Merkel is taking over the bailout plan. See more here at Reuters.

Markets are now almost completely focused on the speech due from Bernake at 10 am eastern time on Friday (2 am NZ time on Saturday) in Jackson Hole in Wyoming. QE III. Will he or won't he?

The New Zealand dollar was solid at around 82.8 USc in morning trade.

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28 Comments

Anyone with an interest in the UK mights like to read this:

http://www.tullettprebon.com/Documents/strategyinsights/Tim_Morgan_Repo…

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Thanks Andy, looks like a good read, if a bit sad. Reminds me why I moved here 20 years ago. Bankrupt country borrows more to engage in foreign wars and then wonders why it is still bankrupt. You just couldn't make this stuff up.

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But we're different! - "As..... debt-driven economic misalignment unravels, property prices can be expected to fall sharply, unemployment to remain high, ( the currency) to remain weak, and real incomes to continue to fall as inflation continues to out-pace earnings..." ( From Tullet's link - thx, andyh)

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Yes, I agree with you about property prices but at least we have some food and some farmland left to sell. I suppose they could export hooligans (good cannon fodder traditionally). Sad, sad, sad.

 

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andyh : Fascinating article on the UK - what a mess that country is in. They will seriously have to cut back their public sector and take some serious pain in order to get back on track.

In a way this mirrors what has happened in most western countries. Too much emphasis on borrowing, financial sector grossly enlarged, entitlement culture amongst the general populous. Essentially too much borrowing by governments and individuals leading to a virtually bankrupt nation.

NZ is not too far behind but hopefully NZ's strong commodity exports will pull it through.

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If they don't "pull us through" kiwipete, we can fall back on WFF and govt rent subsidies and JKs contacts in the easy credit markets.

ps. Did BH find out whether AB was at JH having G&Ts this week with the big Bee.

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compare the poms to the norwegians and what they've done with their oil revenues over the same period.

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Didn't Greece hire Goldman Sachs to cover up the fact that they were running more than 3% deficits so they could get in the Euro in the first place?

Yes they did .. check it out here .

Dodge dodge.

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The Japanese and Swiss ( and pretty much everyone else!) aren't going to take kindly to another QE. That $100 bio Japanese fund to 'protect' their exporters might just be the first ( another?) shot across Bernankes' bow - QE...and we will protect ourselves ( with tariffs, next time?)... 

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O/T but nonetheless fundimentally affecting the world economy - breaking news that the CERN CLOUD experiment confirms the sun as the main driver of climate change/warming/cooling cycles.

The global warming scammers are on the backfoot.

http://wattsupwiththat.com/2011/08/24/breaking-news-cern-experiment-confirms-cosmic-rays-influence-climate-change/#more-45793

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Do you really believe that cosmic rays have a bigger effect on climate than carbon dioxide? Sounds pretty far-fetched to me:

http://www.newscientist.com/article/dn11651-climate-myths-its-all-down-to-cosmic-rays.html

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Keep "belief" out of it, the science is overwhelming your fraudulent belief system. Are you a paid carbon trading shill by any chance?

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No, just wanting to point out that if cosmic rays were really affecting climate significantly (it probably does to a small extent) then you would see average temperature oscillate in line with the 11 year sunspot cycle. There is no clear correlation. 

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Warmists take a hit - Very Inconvenient !   heres an extract from link referred to by OMG;

CERN Experiment Confirms Cosmic Rays Can Influence Climate Change

 

Retracing those 14 years, what if physics had functioned as it is supposed to do? What if CLOUD, quickly approved and funded, had verified the Svensmark effect with all the authority of CERN, in the early 2000s. What if the Intergovernmental Panel on Climate Change had done a responsible job, acknowledging the role of the Sun and curtailing the prophecies of catastrophic warming?

For a start there would have no surprise about the “travesty” that global warming has stopped since the mid-1990s, with the Sun becoming sulky. Vast sums might have been saved on misdirected research and technology, and on climate change fests and wheezes of every kind. The world’s poor and their fragile living environment could have had far more useful help than precautions against warming.

And there would have been less time for so many eminent folk from science, politics, industry, finance, the media and the arts to be taken in by man-made climate catastrophe. (In London, for example, from the Royal Society to the National Theatre.) Sadly for them, in the past ten years they’ve crowded with their warmist badges into a Hall of Shame, like bankers before the crash.

 

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But cosmic rays (subatomic particles, mostly protons) don't come just from the sun; they also come from outer space. In fact maybe most of them come from there and not the sun?? Those that do come from the sun come from its solar flares, I'm not sure to what extent the activity of solar flares and sunspots are related, if at all.

Given the gravitational pull of the sun, it wouldn't surprise me if most of its cosmic rays cannot escape, but of those that do, they are but a tiny fraction of the vast amounts of energy and electromagnetic radiation that pours forth from it every second. And which, by comparison, renders carbon dioxide as significant as a pimple of an ant’s butt.

Is there a cosmologist or physicist in the house who could let us know?

I think to overlook the role of the sun (since we sit so close to it and it’s so big) and the cosmos (because it’s all around us) in effecting climate change is very naive.

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Hear, hear, OMG.

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Just confirmation of what many of us have suspected all along , that " global warming "  was being used by socialist politicians to bleed their tax-payers under the guise of mending the planet .. Ahem , yeah right .

.. ETS ? ... extra tax , stupid !

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Gummy you cant call it global warming cos we arnt warming (NZ hasnt warmed for the last 100 years(Despite what NIWA try to tell us )

Niwa has been found out "cooking the books "http://www.climateconversation.wordshine.co.nz/2011/08/fraud-or-fumble-from-niwa/
 

 so in future you have to call it climate change ok?

then if that doent work out they will call it something else...

(apologies if this has already been mentioned)

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You are right to correct me ! .... those silly sausages who think that the planet is a static system are in dreamy denial . We had a ripper 20 second quake this morning , here in Philippines ..... good old earth is in motion . Shifting techtonic plates , cooling , heating up , bursting a volcanic pimple .......

..... NIWA are not alone in cooking the books , to feather their own nest . ......

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Given the current state of the play in banking you might find this frsh listing of the top 50 safest banks in the world...makes interesting reading.

I use Rabobank often and they come in at number 6.

http://www.gfmag.com/tools/best-banks/11341-worlds-50-safest-banks-2011.html#axzz1Vygvn7Fo

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Interesting that the Aussie banks are all in the Top 20. They might be "safe" now but when the Aussie property bubble bursts (and it's leaking now) there could be a lot of bad loans on their books.

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Parky must be out working to pay off his mortgage debts..pity really cos he's missing all the fun...and stuff like this... http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10747240      which would be right up his social credit xmas tree...!

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Stuart Staniford has this excellent piece on 'Can we grow the economy any more'? Its US-centric but good nonetheless:

http://earlywarn.blogspot.com/2011/08/can-we-grow-economy-any-more.html

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FYI Steve Jobs has resigned as CEO. Will stay as Chairman. His resignation letter suggests he physically can't do CEO job anymore. Not good and very sad.

http://www.marketwatch.com/story/steve-jobs-resigns-as-ceo-of-apple-2011-08-24?reflink=MW_news_stmp

Bernard

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FYI Apple shares down 7% in after hours trade.

Bernard

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Probably a good time to wait for a slump and buy up Apple.

There seems an enormous momentum in their business and Jobs hasn't been doing the full CEO job for quite some time already.

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He was one helluva leader and show-man . But as you say , Apple has momentum .. they've got world best products and excellent retail outlets ....

.. the slump may be short lived ... if you're planning to snaffle some Apple shares , don't wait too long  !

Bravo Steve Jobs , job well done .

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Fonterra says: "Milk solids collected for the 2011/12 milk season-to-date is 9.9 per cent higher than at the same point in the previous season. However, it is very early days in terms of factors that may influence milk supply with only 3% of the forecast full season milk collected."

https://www.nzx.com/files/attachments/144777.pdf

 

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