90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: Iron Chancellor Angela Merkel refuses to allow ECB bond buying, but Italian boss of ECB may relent; China factory output falls

2nd Dec 11, 9:01am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that German Chancellor Angela Merkel again refused to agree to market demands for the European Central Bank to print money to buy European bonds.

Many banks and market players want massive action from the ECB to stablise a European financial system seen on the verge of a meltdown associated with a collapse of the Euro currency zone.

Merkel also rejected talk of the creation of a single Eurobond that is guaranteed by all countries, including Germany. See more here at Bloomberg.

US and European stocks were however broadly flat after relatively successful bond auctions in France and Spain saw bond prices rise and yields fall. See more here at Bloomberg.

Meanwhile, the new Italian President of the European Central Bank, Mario Draghi, gave a speech where he appeared to open the door to more bond-buying.

Draghi said he wanted to see Europe find a new "fiscal compact" where rules about budget deficits were set and adhered to.

He didn't specify what the ECB would do to expand, but said the 'sequencing matters', which many took to mean he would only act after new budget rules were put in place. See more here at Bloomberg.

Some worry he may not have time to wait. A summit of European leaders is scheduled for next Friday, the day after our Reserve Bank delivers its Monetary Policy statement.

Meanwhile, Chinese manufacturing output fell in October for the first time since 2009. See more here at Bloomberg.

Elsewhere, the US state of Massachusetts has sued JP Morgan, Bank of America and Wells Fargo over deceptive foreclosure practices. See more here at Bloomberg.

The New Zealand dollar was steady just below 78 USc in early trade. See BNZ's currencies report on our site here.

(Updated with detail, links, charts)

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10 Comments

by skudiv | 2nd Dec 11, 9:08am 1322770090

The global fiat ponzi needs exponential growth in new debt to maintain the status quo, there has to be a borrower of last resort as well as a lender. This parasitic behaviour has killed Euroland and they can no longer borrow. Sensing the end fast approaching the Central Bankers have given the green light for the banks to begin feeding off each other, little realising that they themselves represent the fatest pieces of meat. The debt ponzi can continue for a little while longer as the banks borrow and lend to each other. This is all "transitory" and NZ is approaching slower then most.

Got physical items of real value? Got productive assets that perform regardless of monetary phenomenon? Got friends, family, neighbours? You better.

by raegun | 2nd Dec 11, 9:39am 1322771961

China's factory outputs slowing down, Yay, if it keeps up the planet may be able to heave a sigh of relief. We will always be in the do do's as long as all we have that passes for an economy is consume, consume, consume

by Stephen Hulme | 2nd Dec 11, 9:52am 1322772726

Matters have hardly improved - The Ted spread indicates as much.

The problem is on our doorstep in as much as the RBNZ, and they are not alone, have trouble finding solvent counterparties to transact US/NZD FX basis swaps.

The lamentably out-dated statistics in the RBNZ D10 disclosure (section 10) highlight the magnitude of the problem. How large the Treasury and banks positions are is subject to uninformed speculation.

But hey, the ombudsman would deny an OIA request for sure in respect of Treasury data.

by Stephen Hulme | 2nd Dec 11, 9:59am 1322773191

The basic mechanics of FX swaps and cross-currency basis swaps - just in case anyone was wondering.

by Wolly | 3rd Dec 11, 7:27pm 1322893625

Where was that quake......? if that was chch it was like big

by mandalay | 3rd Dec 11, 7:30pm 1322893830

5.7 Region Marlborough

by Wolly | 3rd Dec 11, 7:43pm 1322894621

Epicentre......Tumbledown bay road...how appropriate.... 41.35°S, 174.29°E....depth 60km

hmmmmm....is this a sign of the big one in wgtn...that depth puts it inside the main fault structure....think I would be upping my insurance on line were I in wgtn.

by Wolly | 4th Dec 11, 12:34pm 1322955260

"David Cunliffe would look at buying back any state owned assets sold under the National Government."...herald

but not the assets sold under the Labour govts...doh

This bozzo doesn't get it.....

by Gummy Bear Hero | 4th Dec 11, 3:37pm 1322966252

.... correct me if I'm wrong , but doesn't he have to be Prime Minister of the country to do something that monumentally stupid .......

...... and as yet he's not even leader of any political party .... let alone one with enough popularity to govern .....

Cunny's a bit of a dreamer , ain't he !

by Wolly | 5th Dec 11, 6:22am 1323019341

"The regimes of Helen Clark and Phil Goff are being dragged into the Labour leadership contest, with David Shearer suggesting the party hasn't moved on from the Clark days and David Cunliffe being quite happy not to have the support of Mr Goff.

Others in the party are calling for a deep re-examination of the party in the wake of its poor election result." herald

Hahaahaaaa...the Labouring Party dying right at the point of turning 100...how appropriate. So ends a Party that deteriorated into farce built on falsehoods and a distant dream that they could manage everybody from cradle to grave..their way...yurk.

Cunliffe knows best....he will make the decisions for you.....!

Shearer had a dream...he can save the world his way...with your money !