David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Col. Gaddafi is finally dead, killed by fighters in his home town of Sirte.
Rebuilding Libya from the ground up will be a huge challenge, and it seems doubtful many countries will put their hand up to help. Oil prices fell in overnight trading.
There is a growing fatigue in the West for new international assistance these days despite the urgency of the need.
In fact, first-world Europe is having real trouble getting itself sorted. The much-anticipated EU summit this weekend is in disarray.
The big decisions are unlikely to emerge from it. In fact, there are reports the Europeans are preparing a second summit on October 26 or possibly earlier.
Basically, the German plan doesn't have French support, and the French plan doesn't have German support.
However, while the political mess plays out, bond auctions in both France and Spain went off solidly.
And across the Atlantic, the string of good news continued with the latest Philly Fed survey of business activity coming in much better than expected.
The news is not so positive in China, with evidence of quickly slowing growth mounting. Iron ore imports are down sharply. That will affect Australia, and soon afterward us. Our exchange rate with Australia is weakening in response and that will help stabilise our export advantage into our trans-Tasman neighbour.
The Chinese are taking some big decisions, however. China will now allow local governments to issue bonds directly to help them begin repaying more than $1 trillion worth of loans, which could help ease fears such bank debt could hobble the world's No. 2 economy.
Because most of that bank debt is held by state-owned banks, this will be a massive transfer of liabilities from the Cinese government to local and international bond investors.
The world is about to see a huge new spurt in bond markets, and that could raise global interest rates.
(Updated with oil price falls)
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29 Comments
Govt needs to stop borrowing more and more, just to pay the bills every month. Please give this a thumbs up.
This is not about party politics, this is about responsible budgeting. All the political parties are promising to continue to borrow more. This is debt that our children will have to pay. We need to send a message that this is not ok.
Yesterday NZ Govt borrowed $900,000,000 ($900 million) this is the equivalant of refinancing your mortgage just to buy the groceries. It has to stop. For a family of 2 adults, and 3 children this equalls $1500, for the month. We need to live within our means.
The current government has already indicated that it may break it's word, on returning to surplus in 2014.
Finance Minister Bill English says the National Party will introduce KiwiSaver auto-enrolment from the 2014-15 year should it be returned to government in the November 26 election and assuming the Crown's Budget returns to surplus, as currently forecast, in that financial year.
http://www.interest.co.nz/kiwisaver/56250/govt-introduce-kiwisaver-auto-enrolment-201415-assuming-budget-returns-surplus-forec
As of 2010, New Zealand had the second-lowest personal tax burden in the OECD, once all compulsory effects (such as superannuation and other mandatory deductions) were included in the tax-take. Only Mexico's citizens had a higher percentage-wise "take home" proportion of their salaries.
http://en.wikipedia.org/wiki/Economy_of_new_zealand ref Taxation
And the easiest way to start this off is to reverse the tax cuts.
Agreed. Posting before people start to call you a socialist/communist! ;-)
;o)
I guess Marx got contaminated by the Communist label so I don't know what Communism is. That one is out then.
Socialist? The rabid Right try to define all that is bad about Socialism (in their jaundiced eyes) So I don't hang by that label either.
Maybe I am a Humanist but no doubt there is a rabid group of religious nuts who would have a go at me over that one too.
So before my head begins to hurt..........I resign to accept fate as others may defne me.
i thought i read last week that they cost $2.4bn
did anybody else see that?
that's some pork
I would like to know where the billions of dollars of NZ budget surpluses went during Kullens 9 year reign
Repaying government debt took up a lot of it. Why do you think national is able to borrow so much now?
yeah,easy as, BBlll , - I just hope AIr NZ has enough planes to cope with all the extra workers heading off to OZ for good if that happens
Politicians are like children, when they are acting dangerously you need to tell them off, or else someone is going to get hurt. They might squeal a bit, but thats life. If you let them carry on, and say nothing, they will never stop. Don't think that the banks will stop lending our Govt money, which is what they would do if I asked for a loan to pay the grocery bill. Banks were lending money to Greece right up untill they were downgraded to junk status.
Italy 10Y bond yields now back over 6%
“Many expect to be underwhelmed at the weekend,” David Mackie, chief European economist at JPMorgan Chase & Co. (JPM), said in an interview. “If they haven’t settled the leverage issue, then the sense of being underwhelmed will be overwhelming.”
Re: Europe and FED
The US Federal Reserve has extended it's Central bank liquidity swaps from USD 500 millions to 1,853 millions over the last week. Read report section 2 here.
RE: Stephen Hulme | 21 Oct 11, 10:03am
I guess the Fed were desperate to stop unprecedented central bank sales of US Treasury positions, given a significant auction calender and the failing status of the twist operations -curve steepened significantly since the announcement..
Graphical evidence here.
Graphical evidence indeed.
Last month I moved 2/3rds of my managed super funds out of a property fund (earned a 16% return last year) and into NZ fixed interest securities.
There really is no where to hide these days.
Gold!!!
These are managed funds (super) - locked in for a few more years, I'm afraid.
Thats where a lot of us house our brain ;o)
more bad news for property spruikers - with emmigraiotn and household occupancies increasing, the potential house price boosting effects of low construction rates are being cancelled out
"In Closed-Door Meeting, Bernanke Reveals: No More Monetary Stimulus Coming"
http://www.businessinsider.com/bernanke-no-more-stimulating-from-me-2011-10#ixzz1bN3Dihta
Time to bring the PAIN. He is running scared of OWS maybe imo.
Don't believe it for a second, buying up Mortgage Backed Securities will be the next form of currency debasement.
Prime-x ka boom. (Im not using caps or exclamation marks in respect to Bernard) The Fed always takes the loosing end of every deal it does, anyone else noticed that?
@ Kate "There really is no where to hide these days."
Even fewer once the RBNZ institutes 'Open Bank Resolution'
Facetious remarks such as these:
"Whilst there are differences between different classes of
unsecured creditors, they all have the same legal claim on
the bank. Each has freely invested in a private institution and
has enjoyed a return on that investment whilst accepting
the risks associated with the investment. Under the OBR,
it is expected that all unsecured creditors would be treated
equally with the same proportion of claims remaining frozen
for all depositors and creditors."
are hardly appropriate for those believing the nationwide banking advertisements - public health warnings should be mandatory.
"The top five defaulters with a current child support liability, owe $4.79 million."
http://www.stuff.co.nz/national/5835623/Parents-2-3b-in-debt-for-support
Nothing to see here folks...move along now.....!
Let's see now....2.3billion outstanding....err that would be an annual financing cost of....armmm....about $115 million......how you like them apples?....you the taxpayer are paying out for the parasitic attitude of so many.
I love your punch line David :)
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