Here's David Chaston's summary of the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the bailout deal may be unraveling for Greece.
Not only are EU ministers openly talking about letting Greece fail and exit the euro, but influential hedge fund manager John Paulson has said overnight that the euro zone is structurally flawed and he expected it to fall apart - probably as soon as March this year.
China however is talking up its support for the eurozone. And it turns out, China has lent some US$75 billion to Latin America. This comes after a soft patch for the world’s second largest economy. But that has not dented investor confidence – capital inflows to China rebounded strongly in January.
In the US, the news is all about the expansion of manufacturing output there in January, and an upward revision of the December expansion.
Closer to home, the big Aussie banks are announcing their December quarter results, and the first set from CBA have been strong on the back of lower loan losses. It is a major public issue now, that contrasts booming profits with the drive for higher interest rates resulting from higher funding costs.
Also in Australia, the government there is moving to protect shipping jobs and this new protectionism is forecast to cost the locals in sharply uncompetitive local manufacturing – which may well benefit New Zealand as some capacity is diverted here.
The NZ dollar opens today at 83.5 US cents, it is close to an all-time record high against the euro, and the British pound. The TWI starts out at 73.70 – high, but still some way off its alltime high of 75 set back in August 2011.
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4 Comments
Not only Greece in trouble - Spain, Portugal, Italy, etc.
I’m just reading in a Swiss media – Spain’s public hospitals have 12 billions unpaid bills against “Pharma Roche”. Bills are paid after 500 days only – escalating.
http://healthcare.blogs.ihs.com/2011/12/06/pharmaceutical-payment-delay…
Greece is leaving the Eurozone, whether now or later is immaterial, The problem is what happens to the debt which Euro Banks are holding and what kind of example it will become for the other PIIG.
If Greece manages to come out of the exit relatively ( not total chaos) well, then it might just be the example every other PIIG is looking for....then Eurozone is gone and so is the Euro.
Meanwhile the sovereign debt markets implodes and banking chaos begins again .
Will NZ again be different ??
Fourth-quarter growth figures for Europe were released overnight,
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-15022012-AP/EN/2-15022012-AP-EN.PDF
Not nice reading:
Belgium, Italy and the Netherlands now in recession, joining Portugal and the ever-backwards-sliding Greece. The Czechs also in recession, although outside the Euro. 4th quarter figures for Ireland weren't available but -1.9% for 3rd quarter plus the effects of austerity measures I wouldn't expect a rosy picture there.
Negative 4th quarter growth also for Spain, Austria, Lithuania, Estonia, Romania, UK and, worryingly, Germany.
Interesting point: Iceland, whose public told the powers-that-be to bugger off doing rather well....
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