Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Fitch Ratings has warned it may cut France's AAA credit rating within two years and it has formally put six Eurozone economies on review for a downgrade within 3 months.
Fitch's warning came as it said a comprehensive solution to the European crisis was "technically and politically beyond the reach of the Eurozone countries" and the region lacked a credit financial backstop, given the European Central Bank was refusing to act as a lender of last resort to the region's governments.
European Finance Ministers are scheduled to hold a teleconference later tonight to try to rebuild some market confidence in the measures agreed at a leaders summit over a week ago.
However, they may struggle, given the latest news out of Ireland, where the deputy finance minister has warned that Ireland would need further debt reduction if it was to pass a referendum agreeing the latest Fiscal Compact changes. See more here at Reuters.
European stocks fell 0.5% on Friday night while US stocks were broadly flat. The Italian 10 year bond rose to 7.03%, over the 7% threshold seen as unsustainable.
Meanwhile, the US government narrowly averted a shutdown of spending over the weekend when Congress voted in favour of a US$1 trillion spending bill that will keep the government going until September next year. It required a compromise and a two month extension of a payroll tax cut.
The New Zealand dollar was solid around 76 USc in morning trade.
It remains vulnerable to further falls in line with dramas in the Eurozone crisis. See more here in Dan Bell's weekly currency report.
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24 Comments
If a summit has a confidence half life of 3 days, whats the half life of a teleconference? 30 minutes?
Instead of acting like con-men trying to create con-fidence, what happened to reality? Telling the truth, and how it's gonna end. Greece should have defaulted 2 years ago, could have saved 60 Billion in non-recourse loans.
Then again if we ever stop talking about Europe, UK, Japan, and the US are gonna come under a fair bit of scrutiny, and will have some hard facts to face.
Two of the worlds political hero's had their fingers in the MF pie.
http://newsrace.com/2011/12/11/bill-clinton-reaps-50000-month-from-mf-g…
Hello Captain Calamity : Good Monday moaning to you , Bernard . ... And who pray tell puts Fitch on warning , because of their track record of incompetence ?
..... 2 years warning for France ! ..... make it 6 months and they might sober up to the reality facing them . Germany , as Prof Ferguson said in his interview with Andrew Patterson on RadioLive , is leading the Eurozone into an abyss of financial stupidity . And for some unknown reason , the French have lost all sense of reason , and are toeing the German line .
And here's the link to Niall Ferguson's chat with Andrew...me hearties...
http://www.radiolive.co.nz/Niall-Ferguson-Professor-of-History-at-Harva…
http://www.bbc.co.uk/news/science-environment-16206336
There is some hope for NZ after all.
Shame on them...dairy farmers want the govt to subsidise the Fonterra move to provide milk in schools for free...not free of taxpayer subsidy though....
It is possible of course for govt to manipulate the WFF porkfest so that the cost of a milk subsidy was neutral...leading to the WFF benefit splurge being diverted from flatcreens to the children...milkfat chance.
Watch and learn as the Dairy lobby pressures the Cabinet into this new benefit subsidy rort.
i endorse your skepticism wol.
i mean how do you manage it, and keep it free?
what about lactose intolerant kids? is the milk hala or kosher or whatever? who supplies the sawdust?
i think it worked in a more monocultural NZ, but wouldnt it just be unworkable in modern schools?
i mean, if fonterra want to pay for the whole thing AND keep working on de-pooing our rivers and streams then I applaud that, but if this is going to end up being a cunning scheme to absorb excess production through the next 5-10 years of declining global demand for milk then i'd rather they just concentrate on rivers and be good corporate citizens that way.
Would you bet on Sarkozy winning the French election to keep his job.....mug if you do.
"France is heading towards a joyless Christmas haunted by the prospect of a downgrade of its credit rating, a move that could plunge the country into recession in an election year." herald
Oh the shame.......quick...blame Cameron...
And another front to dig into, BH and crew: the Higher Education Bubble. After all, if'n yer lash out for a 3-year course on one of the absolutely de riguer degrees like aromatherapy, photography, circo-arts, jazz or filum studies, you have only yerself to blame when, unaccountably, there seem to be no paying customers for your wares.
But when Nanny stumps up for your fees, bed and board, there's a whole different dynamic, well captured in this Dr Housing Bubble piece. It's a bit like that back-of-bus advertisement:
"The HP on my shiny new degree was simple: I traded my chance of a house, a spouse and children for a worthless square of vellum (oh, wait, cr*p, it's Xerox paper)"....
Shearer appears to have named a strong shadow cabinet team . And I doubt that they'll copy the error of Goff & his crew , of a 3 year negativity campaign .
..... if they bide their time , allow National to make the inevitable blunders & to seize upon these , and if they formulate better policies than Key's National and Goffy's Labour .....
Come 2014 , it'll be a Shearer led Labour party winning the election ......
...... then we'll get a referendum on becoming a Kiwi republic , with a new flag !
- NORTH KOREA STATE TELEVISION SAYS KIM JONG IL HAS DIED
Great. More geopolitical uncertainty. Because as the Arab Spring has shown us there is nothing quite as stable as a transitory military government to fill a power vacuum (also see Thermidorian reaction during the French Revolution).
As expected the South Korean response is immediate.
- S. Korean gov't shifts to emergency footing on news of N.K. leader's death
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