90 seconds at 9 am: Greek Credit Default Swaps triggered; US jobs better than expected; China posts record trade deficit; Hopes for Chinese stimulus

Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news that Credit Default Swaps (CDS) on Greek government debt were formally triggered after Greece forced private creditors to accept a debt restructure.

About US$3.2 billion worth of CDSes are expected to be traded in what is being described as a controlled default that is unlikely to upset financial markets too much. See more here at Bloomberg.

Meanwhile, US non-farm payrolls growth in February of 227,000 was slightly better than economists' expectations and pointed to an improvement in the US jobs market. The Dow rose 0.1% and the New Zealand dollar was steady around 82 USc.

However, China posted its biggest trade deficit in February in 22 years after a slump in exports to Europe. China's economy is slowing faster than some expected, which also helped push its annual inflation rate down to 3.2%.

This has increased hopes that China's authorities will now be able to enact stimulus measures to speed up the economy again.

Closer to home, Labour leader David Shearer is proposing a private members bill to entrench in law the judgement against the Shanghai Pengxin bid for Crafar Farms. It would force foreign buyers of land to prove it would benefit New Zealand.


We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.


Tsk tsk Bernard, the $3 billion is the net loss on Greek government debt. The gross loss is more like $30 billion. So some people lose $30 billion and some people make $27 billion. Some of those will be the same people of course.
Also, once there is one default a whole heap of other debt becomes repayable immediately as a lot of bond contracts say you default on any other bond and this bond becomes repayable in full, principal plus interest, within 24 hours. (Your mortgage loan from your friendly Aussie bank has a similar clause - if in the sole opinion of the bank you are unlikely to meet your financial commitments to them then all loans become repayable immediately).
Then there are all the other bits of bobs of loans guaranteed, not borrowed by, the Greek government. Think local authority loans, railway loans, you name it.
The chances of an orderly default seem very low to me, despite the wishful thinking and spin of the ruling classes.
Don't you read zerohedge or the slog anymore?

Busy Bernard!...forgot about Portugal Spain and Italy...oh and Ireland....! Thems much bigger problems than tiddly Greece...the domino are falling...

I agree the European problems are far from over, but this formal default isn't going to cause the immediate financial carnage once feared.
That's because of the 1 trillion euros of nearly free money dumped into the financial system by the ECB in the last three months.
I agree this is just buying time, and then the focus will turn to Portugal, Spain and Italy.
This is why I'm sticking with my bearish view about growth and interest rates (staying low for a long time)

Yes, I see the thinking, but it is rather a best possible case. It assumes the bureaucrats and bankers (the ruling classes I refer to above) do in fact know what they are doing. I know they really do want us to believe they know what they are doing but I just don't buy it. Those French bureauctars are very bright but surely even they cannot forsee all the problems a default will cause.
Just saying I was surprised how complacent the media has been, so far. They have just printed the official press releases from the EUSSR.

The fact its only 3billion is an eyebrow raiser....this suggests a few things,
1) CDSs I assume expire? and the time delay we have seen allowed this and no one would take out more?
2) I assume the ECB is now in effect the only player.
3) Its been carefully reasearched and once it got down to a negligable amount simply allowed to happen....
"repayable immediately", this is aimed at a one off instance...reality check there is no way this could be enforced en-mass, our NZ Govn would fall...
Lots of stuff on zerohedge is opinion, crystal ball gazing, what ifs.....I read it for the information....then form my own opinion....trying to make sure there is no pilitics etc involved.

Hey guys, got a question for everyone, if you had 50K lying around what would you do with it?

Donate it to the National Party....!

Actually, I'd spend it on oil-based infrastructure that i'd need in the future, before it becomes unavailable/unaffordable.
Oh, that's right, I already have.                    :)

Hell Wolly! I would work it's arse off or at least somebody else's on it's behalf  -  not let it lie around in lazy poitical party coffers. 

SH - I suggest you do an introductory physics course. Money doesn't actually 'work' at all. It's the cognitive misconception of all cognitive misconceptions.

I wondered what my  BSc (Hons) was for.

I was serious lol I have an inkling with what I should do with it, just wanted a few opinions

Muppet King
Gear it up with a 95% home loan and buy NZ$1 mln of property with my ears pinned back.
Ya can't lose with property maaate. ;)
The government and the Reserve Bank will never let property prices fall. And we're headed for yet lower interest rates.
I'm kidding. Sort of...

My $50ooo has bought me places on ten Working Groups ( with bloated compensation) and appointments to three govt committees for two terms, plus a knighthood and several other cash cow no work scams..... 

Go and find a vineyard in recievership/foreclosure, pleanty of them around.  Prices have crashed by about 50% in some places. 

No way skudiv...you can't beat investing in politcial party donations..the returns are fabulous...

Classic - Hickey recommends gearing to the tits on rental property!

Just property?  Can you get a 95% loan for rentals?  No doubt you could get a cashflow positive rental with a 50k deposit.

I would suggest it would be prudent to put a portion of it at least, into a half box or so (250oz) of silver maples (1oz silver canadian coins).
Silver has monetary charactritistics, so it is a play betting against central banks protecting the integrity of their currencies.
Expect there to be volatility, and the possibility of it dropping lower at some stage but I expect it to be worth multipules of where it is now.

Forget it Muppet King .
Money or credit as it is otherwise known today is comedic. It has become irredeemable, hence worthless at some time in the future. Guessing the exact time is the difficult part.
And I am certainly unable to help you out - others less talented will offer their services for a fee. 

Well you're wasting your time around here (as you can clearly already see) asking for sensible and insightful suggestions on how best to invest that money. Frankly, I don't think anybody around here has a clue on how to make a quid. You should look elsewhere for an answer to your question.
And for those who can't figure out what my suggestion above actually is, my suggestion is don't ask for opinions on what to do with your money in here!

SH - given your fiscal comment above.....................nothing.
Think money can be expected to return a dividend (on average) beyond the energy-supply peak?
If, of course, the 'work' you refer to, is putting society on a sustainable footing before mother nature does it for us, I'm with you. If you mean 'work' in as 'returning a dividend', I'm not.

Establish a grid tie home electricity generation plant and put the rest down on a fully electric car.

Kate some possible serious issues with your ideas....not least is short term....if you think its going to be somewhat rough. 
A MiEV is $65k....v 20k for a standard one that will last 20 yers and not 10 of the MiEV.  With 45k earning interest How much petrol would that buy you?   So you put down money on a MiEv and take on debt for the balance?  Debt is bad news in a depression.
Another big and real risk, have you considered what happens to your MiEV car in the event a civil defence emergency is declared? ...If the Iranians shut the Straight say?  In NZ we produce virtually no petrol or deisel. They take the MiEv away and use it....free of charge (oops pun)....so unless its screwed down having something "essential" no one else has means you lose it for the "public good" to emergency services, and thats everything from Police to a self-important Pollie "needing" transport, been there seen how they think and how it will happen.
"grid tie home electricity generation plant" so OK I assume wind or water....I really doubt solar cells make sense.  Its at best a sop....ie Pollies insist power companies pay you a premium to make it "economic" when really it isnt. 
The best way is to think on really what you need and how its kept and looked after long term.....so simple solutions, IMHO. Cant get better than good insualtion and a wood burner for low cost and simple, hard to "steal" in a civil emergency....worst case wander the woods getting wood. Need electrical power....I'd look at a small deisel generator, hide it pay cash.  Something that can run bio-deisel, bio-petrol is too hard DIY, you will be around for 60 odd years, the tech has to last or be repairable that long....and preferably handed on to children...

Already got the insulation, the woodburner and the wood (60 acres in radiata) and your comment reminds me... I need a horse too :-). 

Why don't they call them battery powered cars?  Automaticaly you realise that batteries are expensive, and need to be replaced often.  1/4 acre of sugar beets, a solar still and ethanol motor, maybe an ethanol powered generator as well. 
I have NFI what I'm talking about, just a suggestion.

Year ago I recall seeing a Bambino with a wind up spring drive system!...it was doing about 40 mph along the Hutt road and the key was unwinding at the back....why can't we have more of them...


So, with all the water treading going on every day on this site (economic theories, energy-schmenergy, etc.) no one (except Bernard) is able to provide a guy with a good advice on how to invest his 50k?!

Whats wrong with putting it in the bank, we are like Japan ecept we dont have the exports or the savings. Every thing is stagnating, costs are up but incomes are stable people are worried about losing their jobs, theres a time to take risks and this is not one of them. Without growth in debt our economy will revert back to what we can afford and thats not going to be pretty.
 I talked to a local contractor he's in the gravel extraction part of roading and this morning not a single customer, he said Monday morning is often his busiest  time of the week and he thinks his job is going to go, so he's looking for work in Aussie or Canada. If he's not busy then the trucks are not busy and on it goes.  The unproductive have exceeded the productives ability to pay, she's all down hill from here. Stick it in the bank and count yourself lucky to have a bit of capital, look how many people have lost theirs in finance and other dodgy deals. Just got to get it through the next 4 or 5 years intact, thats the name of the game today.
 Oh Lamb back again at the weekend its going back faster than dairy, soon the sheep bubble will be over and farmers will be back to pesantry, dreaming of the next boom ,that should be about 20 years away.

Assuming no debt, hold cash or cash like things.

Alex 13 / DavidB - I was never more serious. Stockpiling in the face of depletion, is the best investment. Of course, it presumes an ability to override denial, and the intelligence to be investigative.

Thanks for your comments everyone, I've got a feeling certain percentages will go in stocks, bonds, commodities, managed funds and cash. Theres no way I'll gear up hard. Aim is to be liquid.

Well Alex13  I did tell you or someone very like you prior to November to buy those Chorus shares.......would have worked out well even with the small change.
 That said I had bought pike River shares some long time back so why the hell would you wanna listen to me..............ooooooooooooouch!
Said it before , and at the risk of repeating myself......
Free advice is worth every penny you paid for it.

Don't know the cricumstances, but I might:
1.  Pay off $25,000 worth of debt.
2.  Buy $5,000 worth of gold.
3.  Buy $15,000 worth of shares, an index if I didn't know anything about shares.  Although it could be fun to learn.
If I had a serious business opportunity I would probably pursue it.  But $50,000 isn't a lot to start the kind of businesses I know anything about.
Other thoughts:
Maybe invest in yourself with more education towards a new career.
I have always found it a good practice to have two months of salary on call in cash so when the unexpected happens you can respond without using debt.

Start a business (if you know how to do something useful, or can pay people to do useful things)
Buy some farmland, grazing, cropping, with a stream or river (you'll need more then 50k though I bet, and you need to know a bit about farming, or at least know someone who does)
Chch rental (no real skills required, make sure there is some margin between rental income and debt servicing, to pay rates and insurance)
Greek or Chinese equity indexes, JBTFD.
Some silver I wouldn't go over 5% unless you are holding cash/deposits.
Gravel quarry.
Just in case Steven is right, a carrot farm may be the biggest winner.

YAY! Chinese IMPORTS of crude oil soar 18.5% in a year to hit a record 6 million barrels per day:
At anything like that rate of continued increase China will overtake the US to be No 1 global oil importer in just 2-3 years time - the US currently IMPORTS just over 9 million barrels per day
Imagine. All that imported oil.

Drill a little deeper Andy...Beijing is stockpiling the stuff...google it.

As does everyone, Wolly. Called 'strategic reserves'. Doesn't change the availability picture.

You cant see the wood for the trees Wolly - in 2011 something like 15 million new wehicles joined China's roads.
In any case - from the first article I quoted:
-''In addition, as much as 79 million barrels of new storage facilities will come online this year, the International Energy Agency said in its monthly oil markets report''-.
Importing at 6mbpd that would take them all of 13.1 days to fill all that new storeage. What do you think makes up demand on the other 352 days of the year?

That's govt reported new storage Andy...take it with a grain of salt. My money is on military storage being kept secret...who knows the quantity?

Good grief Wolly.
For the sake of arguement lets say the top secret squirrel military built the same amount of storeage again as the civilian side. Woopy-do thats 26 days of the the 365 days of 2011 (at 6mbpd) accounted for then eh?
Clearly those 15 million extra vehicles matter not a jot in Wolly land.

It's Crude Andy....CRUDE....now go break it down into what it is turned into....don't assume the reported increase in imported quantity is caused by the reported increase in vehicles...yes demand has increased for petrol and diesel....but what of plastics and all the other byproducts!
Wollyland is a wonderful place Andy...you will be here soon!

You can only stockpile so much and it costs $s to store it.....leaving it in the ground is free.....so having some makes sense.......

interesting piece on Iran and the straight.  Those Iranian mini-subs would be swines to find.....so small it would be close to impossible until torpedeo launch and then its too late....and 750,000 super tankers cant dodge........

Lol. It is going to be interesting isn't it. But horrid at the same time.

it could be....
These subs look serious little sods.....in the first one you see the propellor, (about 27secs in)....that looks like a serious low noise design.....if the rest of that sub is as well designed.....looks like is has 2 torpedo tubes.....can lay mines......being so small they will also be very tough.....
Then there is their wee attack boats....complete with cruise missile(s)...very hard to; find, shoot and once those things are lauched very hard to stop.....the warheads are not big so I think wouldnt sink much in a single hit....but it is a war of attrition/guerlla....cheap fast to build hardware v very expensive, slow to build hardware...short disantances.....ikky
The columbians are also using semi-submersible drug runners.....almost awash, simple fibre glass hulls, fast....v8 american engine(s) (LOL how apt) if the US cant stop them delivering drugs what hope stopping suiciders....quick trip out, hello 72 virgins.... 10 tones of cocaine could easily be 10 tonnes of c4....bye bye 2 or 3 fanatics and a supertanker....send 6 at once say.....

Look into sonar buoys. It has been the mainstay of our security for decades, you don't need a ship to detect submarines. Further Our search and rescue capability via the P3 Orion could pick up something the size of a rugby ball on the surface with hardwared they had 20 years ago. In a concentrated area the combination of radar and sonar might not be so easily beaten. But then again it might.....

I used to work on hunter killer subs....so I know a little.... one hunter killer got so close to a ruskie the ruskies props took off the sub's casing.....its not easy...and these are a lot smaller.....and a properly made deisel is the quietest type...
Sonar bouys have to be planted....a diver and some c4 makes them an easy  "unlnown kill, Iran owns half the straight......So iran has a 12 mile limit as agreed internationally.....but, "The strait is 21 miles wide. In the northern side, 10.5 miles are sovereign Iranian waters, and the 10.5 miles in the southern side are soverieng Omani waters."
So plant bouys where?  US has no right to tbe in or plant military hardware anywhere in that.....so they have 1/2 of it......kind of narrow whats left....there are two ship lanes....one in and one out....supertankers are huge they need a lot of space....
Iranian Cruise missles, the smallest, 35km range, 0.8 speed of sound.........768/0.8=600mph......10 miles...in? 
"Nasr-1 Is a domestically-manufactured Iranian short range anti ship missile[1] capable of evading radar. It has the capability of destroying 1,500-tonne[2] targets such as small warships like frigates. Nasr-1 missile can be launched from both inland bases and offshore military vessels, and is being modified to be fired from helicopters and submarines."
Really I think the US is on a hiding to nothing....

I was thinking of those randomly deployed by aircraft, as our airforce does. But in a battle situation I don't see why they couldn't be dropped in an array. They are small and float and if dropped in numbers would be hard to counter.
But yes Iran has plenty up their sleeve.

I dont think they can have any military hardware "left", bouys at best drift.... So civilian ships have a right of free passage....not sure 100% if that includes warships...but its "transit" not sit on my fat american butt 100 yards of iranian's port(s)....
".... "Innocent passage" is defined by the convention as passing through waters in an expeditious and continuous manner, which is not "prejudicial to the peace, good order or the security" of the coastal state. Fishing, polluting, weapons practice, and spying are not "innocent", and submarines and other underwater vehicles are required to navigate on the surface and to show their flag. Nations can also temporarily suspend innocent passage in specific areas of their territorial seas, if doing so is essential for the protection of its security."
Bouys are passive and active......passive just listens but has to send some sort of signal, so can be triangulated I would think....a quiet swim and a c4 pack solves that one, hey sorry we were clearing "rubbish" or doing a bit of target practice on floatism, did you lose something? .....Active ones are easy to find...the pulse is one huge "hello here I am"....and shallow water plays havoc with both...

Go Iran...eh Stevo...teach those yanks some Naval tic tac toe......till the temp in downtown Tehran goes up a few hundred thousand degees and Ahaventhadmedinnerdad says "is it getting hot in here or is it just me...?" 

So the US drops a nuke....oh dear nasty PR "fallout" there.....trouble is they would have to nuke a lot of iran in the process, genocide comes to mind kinf of makes them look like Nazi's....extermination of a ppl....and all that.........so irradiated petrol anyone?  4mbpd off the market, twice the amount over Libya...and tahts just iranian production....
What mariner would be insane enough to sail on a tanker past Iran?  so 17mbpd bye bye....
Tehran might be overly warm but a lot of ppl would be very cold, hungry etc...

Thats why Israel is going to do it for them. They have bigger Nuk capacity than China. Oil consumption is dropping like a stone in the USA

My main point is that America is an empire and isn't going to give that up willingly. The empire is dependant on oil so you can pretty much count on them securing their supply, or at least attempting to. You can bet that it is a 30 year plus stategy they have worked on to make sure it happens.
It is just ironic that the tyrant has all this time masqueraded as the one protecting democracy for the world.
Steven have you ever read the story, famous in special forces circles, of how two SAS guys camped within metres of the Argentinian soldiers for 28 days, all the while calling in air stikes onto enemy positions in the Falklands? You can bet they will be into Iran well in advance, if not already. That is why they need to keep the Iraeli's in check to a degree.

More information about the issue:

Oh yes......Bush? or his side kick said pretty clearly "the american way of life is not up for negotiation".....and that means they expect to keep using the quantity of oil they do now.....plus a bit probably....Now when 5% of the world's population uses 25% of the oil and wont let go of any of it....then the only way they can do that is via violence.....to my mind.....they cant do it any other way...can they? I cant see one myself....and I dont think they could do it.....while trying to though NZ's economy would/will die....
"Ironic" yes but anyone who thinks they are protecting anyone else but themselves is day dreaming....quite why the likes of JK cant see Asia is our only future I cant understand.
Scarfie, the SAS are in-arguably (to me) the best in the world...but are few...v the aveage American soldier/sailor who frankly fires first and then shoots up on their drug of choice afterwards....just watching the apache gunner killing ppl in bagdad was enough. Sure the SAS can do some really good surgical strike type things, one reactor, yes, 2 yes, 10 probably......taking out the entire iranian navy say in one go? doubt it....

Geeseus mate when it comes to double dealing mudering bastards the poms wrote the book......when it comes to forcing their Colonial ideology at gunpoint where ever they went the poms...when it comes to taking part in Detent while planning their next assassination they top the list.
You need to be reminded in this part of the world the poms ( Churchill) said let it go we'll get it back................like bloody hell they would have....and were it not for those yanks you would not have even been able to immigrate here to peacefully whine on about them from the backwash.
 Please don't bother to respond with the English version of what happened in the Coral Sea as it's just like the places they discovered that already had people there.....but they 9the history writers) had the microphone right.

LOL.....indeed......these days however GB has no empire and no real clout.....the past in a way doesnt matter...when it comes down to it the US is the guy with the biggest appetite for oil and power to [try] and get it....NZ wont matter unless significant oil is found.....otherwise we will be left out in the cold.....I cant see how else it will go.

Lol. But coming back to my point, they aren't going to stop now are they? The yanks are gradually taking the matle off the poms though. I can't how see how some sort of war somewhere can be avoided at this stage. (Well I will be trying my best to avoid it) Who wins is probably a moot point as we all actually lose. You would have to put your money on the poms when they are involved though. As Walter points out the war is already on, just not officially.
BTW I have been in seas of the sort in your link but only a 24m boat. It was not fun I tell you, pretty hard to sleep that is for sure.

Nobody wins ...your right about that scarfie....and worse we go back and do it all again...
I'm still trying to figue out how to become a conscienscious objector to God and Allah.

Christofff: steven has either never heard of, or, has re-written the history of Jardine & Matheison, but I bet the Chinese haven't forgotten.

So the USA is their effective successor....

what Mariner you ask Stevo...?would be insane enough....
 why these crazy Bastido's of course....somewhere off Terra Del Fuego....cop a load o this  makes Perfect Storm look like a bathtub scene.

The global liquidity cycle has already rolled over. Assuming that no fresh action is taken, world economic growth will peak within a couple of months and then fade in the second half of the year - with grim implications for Europe’s Latin bloc.

1 hour ago


Every time the S&P 500 increase margins in conditions of excess supply they suppress demand even more by increasing prices or reducing real wages - just another addition to the downward spiral. Yes, given limitless virtually free funds from central banks you can invest in monopolistic corporates safely for now, but in the longer run they must crash, because this political economic strategy is not feasible.


In a command economy like China that doesn't have a consumer base like western economies - what exactly does a stimulus package look like?
Surely the money has to flow where it can, into shares and property.  Is there any way it can realistically end up not being a speculative bubble?

Building infrasturcture, somehow they worked out that building infrastructure gives a much better long term bang for buck then accomodation supplements and welfare payments.

Gosh ,sorry Bernard just can't leave it at 69 ...it'll leave a bad taste in my mouth
 And so 70...Yay ,ahhhhh that's better.