David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the International Monetary Fund revamped its credit line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil.
The changes, which enable countries that pre-qualify to request IMF funds without having to make as many policy changes as with traditional loans, come as Europe’s crisis threatens to spread to Spain and France. The IMF is co-financing bailouts in Greece, Portugal and Ireland and is preparing to send a team to Italy for an unprecedented audit of the country’s efforts to cut its debt. But more loans, when the problem is too much spending and too few taxes, is hardly a sustainable solution. It is just compoundiong the failure of public policy.
Across the Atlantic, the American public policy failure just gains momentum, although there is a crude 'solution' looming - the end of the Bush-era tax cuts, which will raise revenue from the wealthy, along with substantial automatic spending cuts. Both sides of the political debate will take substantial pain, and the immediate impact on US growth will not be positive, but as crude as it is, it is action in the right direction.
Third quarter US GDP growth was revised down a bit, but US payrolls showed good signs of expansion in October.
Closer to home, the Australian parliament looks set to pass its mine tax legislation, but just at a time when demand for iron ore seems past its peak. Prices are falling, and mining activity slowing sharply as demand from China weakens.
Despite all this uncertainty, gold has made only a small recovery after its steep fall a few days ago. The NZ dollar is trading pretty much unchanged overnight.
And as our election looms, don't forget to check all the detailed policy comparisons we have on the site - eighty five separate areas are covered so we are sure to have the ones you are interested in.
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