European and US stocks surge on Euro rescue hopes; OECD cuts global growth forecasts; NZ$ up to 75.5 USc
Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that European and US stocks surged 3-5% on hopes European leaders might find a way to stop the European Sovereign debt crisis spiraling out of control.
See more at Bloomberg on stock market rises.
Germany and France are preparing to propose fast-track moves for a Eurozone wide fiscal union to go with the euro zone's monetary policy union. This, in theory, would avoid the need for changes to the European Union treaty, which would require referendums in many countries. See more here at BBC.
In theory, this fiscal union would allow the European Central Bank to step in to buy distressed European sovereign debt.
Also, there is talk the European Financial Stability Fund would guarantee losses on 20-30% of European bonds, which European officials hope would restore confidence in the market. See more here at Bloomberg.
However, Europe is far from out of the woods.
The OECD warned overnight the Eurozone and the UK were falling rapidly into a recession and it downgraded its forecasts for global growth to 3.4% from 3.8%.
It also warned that an Italian or Spanish default on sovereign debt could cause a global contraction. See more here at BBC.
The New Zealand dollar rose to over 75.3 USc overnight as investors bet again on riskier assets and riskier currencies, particularly those exposed to commodity prices such as the New Zealand dollar.
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12 Comments
But really there has been no can kicking.....its now on the vague vapourish promise of a can kick or unknown size or shape of some sort....
I find it plain wierd.....especially with the big banks holding all the trading cards like ultra fast trading....anybody else has no hope.
regards
"Surge"...on the back of nothing...Mish outlines the matter....the rescue is not taking place..all was hot air...the piigs fiasco and euro failure remains in place...the ECB continues to be the bond buyer...breaking EU rules...who gives a toss.
http://globaleconomicanalysis.blogspot.com/
http://www.news.com.au/travel/news/pressure-mounts-to-axe-gold-pass/sto…
Please read this. Its about Australian politicians who retired ' yonks ago' still creaming the system. Please share.
Technically , Bernard , it is no more possible to rapidly fall into a recession than it is to rapidly fall into being pregnant . ...... it's black & white . Either you are in a recession , or you are not . Growth may be slowing in the UK and the Eurozone ...... but that does not imply a recession .
..... meebee things would perk up in Europe if we sent them some Edmonds cookbooks ...... even in the depths of a recession , things look ever so much better if you have a plate full of fresh lamingtons ......
Up to your usual high std I see GBH. Well technically for being pregnant you have a DIY pharmacy test kit thing and if its too early and blue its no but you maybe, pink is preety firm on yes.....A full Doctor's test some weeks later and its yes or no.....wait 9 months and you know for certain....
For a recession you have to take lots of disparate data and number crunch and see what comes out...given the varying time delays, unknowns and guesses....you could say yes or no and be wrong......
Personally I'd start to plan some months before either event...I did that 18months ago and bailed from all the investments I could.....others on the other hand will be shocked when they fall off a cliff it seems....others such as yourself who ignored such indicators shouldnt be shocked....
regards
..... I am glad that you approve , steven ...... well , someone has to keep the hickeysterical one honest , don't they ...... turfing out terms 'like " recession " or " depression " with gay abandon .....
A recession is two or more consecutive quarters of negative GDP . .... . easy , huh .......
.... when Chris Carter left the Labour Party , and no one bothered to say goodbye to him , do you suppose he felt gay abandon ?
Nice to see Gareth agrees with me......!
"So long as it gets a government guarantee for depositors the government must in return dictate to the banks what they can and can't do. Otherwise you get what we all dream of - a taxpayer underwrite with no accountability required - yum.
The solution seems obvious. If a taxpayer guarantee is in place for depositors then the institutions taking in those monies should be severely restricted in what they can do - such as lend them according to old-fashioned prudential principles."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10769426
But he leaves out the need for bankers to face prison sentences...not me....lock em up I say.
Get the message Mr Key....do you?....Bollard is out of control...the banks operate any way they please....hence this OBR madness....that promises to cause the disease....think about it John.
I think this may headline today's top 10
"A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger."
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