90 seconds at 9 am with BNZ: US, European stocks slump on Greek default and Eurozone fears; NZ$ drops to 82 USc as risk appetites shrivel

90 seconds at 9 am with BNZ: US, European stocks slump on Greek default and Eurozone fears; NZ$ drops to 82 USc as risk appetites shrivel

Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news that US and European stocks fell more than 3% on Friday night as fears grow that Greece is about to default on its sovereign debts and unleash more mayhem inside the European financial system.

The Greek 1 year government bond yield rose to 98% and markets were pricing in a 90% chance of a Greek default.

Germany appears to have decided not to provide another bailout for Greece and is now preparing to bail out its own banks, who are expected to have to book big losses on Greek bonds and other Greek assets if a formal default is declared. See more here at Bloomberg.

Germany's Finance Minister threatened to withhold a bailout payment. Greece's Prime Minister pledged to avoid default, but the Greek economy continues to contract, making it much harder for Greece to dig itself out from under the debt.

Greek GDP fell 7.3% in the first quarter from a year ago and is expected to contract a full 5% this year.  See more here at Bloomberg.

European bank stocks slumped and European stocks fell 3.7% overall. See more here at Bloomberg.

French banks are now expected to be downgraded by Moody's, Bloomberg reported.

The surprise resignation of European Central Bank (ECB) Chief Economist Juergen Stark on Friday also unnerved markets. See more here at Reuters.

Stark resigned in protest at the European Central Bank's wholesale buying of Italian and Spanish bonds to bolster the Eurozone. See more here in my explainer on the European crisis.

US stocks fell almost 3% and bank stocks were particularly weak.

All this fresh turmoil on global markets saw investors take risk off the table. That drove the New Zealand dollar down to 82 USc from over 83 USc earlier on Friday.

Markets are also looking ahead to the Reserve Bank of New Zealand's decision on interest rates on Thursday morning at 9 am. Most expect the RBNZ to hold at 2.5%. See more here in our preview.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I reckon the Welshman landed his shot and Wales were hard done by.  Imagine if it had have been NZ instead of Wales with Barnes ther ref! Another Euro crisis!

Well if by now you are not sitting in cash, cash equivalents and PMs then you have not been paying attention.

Anyone else notice the German stock market (DAX) is now a staggering 31% down from its 6 month highs.......

Australian housing shortage 'myth' :

http://www.bloomberg.com/news/2011-09-11/housing-bears-say-shortage-myth...

I wonder what the Jonkey will have to say when the Aussie economy goes fully teets oop off the back of a house market fall/China slowdown?

Something along the lines of 'Hoocoodanode?' I imagine.

You buy one and you get the house next door FREE.....

The collapse of the Irish economy and the subsequent financial bail-out by the EU has led to interest rates hikes which means borrowers are finding it difficult to keep up with mortgage repayments, while housing prices have plummeted.

http://finance.ninemsn.com.au/newsbusiness/8297032/irish-agent-offers-two-houses-for-the-price-of-one-deal

 

"Greece on Sunday announced a new tax on real estate to make up for budget slippage and meet this year's deficit target...". And here in NZ we have a 'budget slippage' and a C/A dfficit beyond expectations...what do we think our Government will do ...?!

Smile and wave.....  ;)

andyh

 did you catch this article on SCF, time for action?

http://www.stuff.co.nz/business/money/5598137/60m-mistake-in-Hubbard-case

No I hadn't thanks. Mr Hubbard made his affairs fantastically complex, did he not? I hope, despite his death, that the authorities continue to delve deeply into this - there was clearly much rotten at the core of SCF.

This has just popped up on NBR

http://www.nbr.co.nz/article/hubbards-not-given-money-error-say-statutor...