90 seconds at 9 am: Risk aversion to fore; Spanish debt worry; Australian trade deficit; Chinese bank reform; US$ gains

Here's our summary of the key news overnight in 90 seconds at 9 am, including news that yesterday's shift in sentiment to risk aversion has continued in global markets overnight. The Dow is down sharply, as is the oil price, and both precious metals and semi-precious metals have taken a sharp tumble.

A surge in borrowing costs for Spain overnight unsettled financial markets and showed that even if the European debt crisis was in remission, it was not cured.

A decision by the European Central Bank on Wednesday to leave its main interest rate unchanged also reflected concerns about the broader euro zone, where the economy was sputtering and credit was still tight.

That Spanish bond auction was notable because there were far fewer local buyers than recently; the foreign buyers had long since departed. But if the locals are also shunning Spanish government bonds, that only leaves the ECB. And that may help explain why the head of the ECB was tight-lipped following his rate decision.

In Australia, they have announced an unexpected trade deficit again, this time on lower coal exports.

The Chinese news is all about reforming the huge 'dinosaur' State banks - a mammoth task but one they seem to be focussing on.

In the US, the latest employment report there confirms that March payroll growth was very positive; ADP reported growth of 209,000 new jobs in the month. There was also news that the standard survey of service industry health maintained its very strong reading despite a small slip.

All this news helped push the US dollar higher and the NZ dollar opens this morning at US0.8140.

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?

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Still no QE3 eh Wolly..?...hmmmmm lemme see now did I keep those posts...oh yep I did.
 Spare me the QE3 in another dress routine please.....!
 It just didn't happen did it.....because it was solving nothing....maybe Bernake actually looked up the definition of stupid, ...and thought ...oh dear, my goodness that sounds like me.

Well I wonder if you read my post about the Fed doing a trillion $ currency swap just before christmas to save the Euro?, that will give them enough to keep things going until after the Nov elections.....(at least)
Bernake is a cheer-leading show pony, he doesn't need anymore QE this year... eventually he will as who else will come up with the money to cover over a trillion dollar US cash deficit? (certainly US citizens arent saving at that rate and the rest of the world is growing weary of holding USD).... of the 3800 or so paper fiat currencies gone the way of the dust bin, the USD and co are just going the same way... give it time... so that will make 3801+ and counting...

Yep I did Economist.....and had no argument with it either....!
Although i'm more in the camp of Bernake being a Spineless Muppet...than show pony....the fear never leaves his face while doing the bidding of those who would be King.

Erik Townsend has a theory that Bernanke will ease again to ensure the stock market is kept up until at least the election...
And that one of the reasons for QE3 not happening is that Bernanke doesn't want to use it until required. (if at all)
See http://www.chrismartenson.com/taxonomy/term/120
If no QE before the election then go ahead and sneer..  However...Wolly may yet get the last laugh.

Thanks Gibber...I read Erik T.s comments on it also....and I take your point on board , however you  need to know the history of the chat between Wooly and myself  to know who was sneering at whom....this goes back to last Feb...every time (at least once a month) he put it up as a definately this time , I would challenge that's all.
 I do apologise if it came across as a sneer to both you and Wooly or one and the same, but it's more a freindly gloat really , nothing malicious in it .

thanks for the reply. 
Maybe it is just me. There seems to be a general tenor of, for want of a better word, "sneering" on this site.
If it wasn't for Stephen Hulme and Andrewj's posts I would have abandoned the site a long time ago.  Lots of noise.

No worries...you need to look to find the printing...it is going on...I doubt Bernanke can call it QE anything anymore.

Cheers Wooly.!!.me ol gypsy camper...one thing we can agree on is that Bernake has been the intravenous drip to a Vampire Squid taken ill with Haemophilia.
 "I canna slow it doon jimmy"..."it' just woont clot.."!

Yep...one 'clot' trying to work out how to cause a clot.

I had wondered about that...ie what happened to funds once outside a country's borders sounded vunerable to me....looks like that is the case. hence I wonder about greek debt where it is in the UK legal system.
I dont think the ECB would go vulture....however I would wonder that this process wont become a huge growth industry.......there will be massive quantities of it....they can pick and choose the best of the 'worthless".....real carion feeders....but then why not....something has to make the Pollies sit up and notice.

A.J. ...probably the best interviews I have seen on the E.U. situation  in reality a must to see...watch all if time allows  but make sure you take in David Lizoain's comments in entirety.
David Chaston ..I would urge you put this in the Top ten if not already....
I'm keeping a copy ...right beside Smartest Men in the Room.

Christov, a friend in banking in the UK told me a year ago that their worst case senario was; %13 unemployment a %50 drop in the sharemarket and a further %21 fall in house prices. A few weeks ago he told me they had reviewed the data and its now their, 'best case senario'.

So I have to wonder if they are or have acted on that and are in cash....

One really has to wonder if the UK is not the worlds biggest potential problem.  1,000% debt to GDP and an economy based on money shuffling and rapidly dwindling North sea oil.

Christov, have you ever read 'Diary of a man in despair'? 
Its a cracking good read, here is one of the reviews,
I have read this book twice, once in the original edition and then this edition. It is a fabulous book.

As to the Reck's aristocratic prejudice, this is something he is quite clear about, but he is a democrat as well -- hence he praises the opposition for being just that. Also, the individuals who really bear the brunt of his wrath are the Generals, the Junkers and the Kaiser before him who forsook their aristocratic upbringing, and sold out Germany long before Hitler took power, and then flirted with him as a novelty.

It is hard to understand Reck's viewpoint without at least visiting or living in Germany and especially Bavaria -- which is a bit seperatist. Also, note his praise of the Munich uprising -- a communist uprising -- where people were still treated with diginity.

His anger is with the sort of lowering of standards, the rise of the masses spurred on by hate, and constantly bombarded with propaganda. It is truly a remarkable book and one that has tremendous relevance for these times.

Thanks A.J.  it's now on the list of must to read. Cheers.

Re the mortgagee sale detailed in the Herald - it's interesting that the bank is defending their claim that they made a reasonable attempt to assist the customer by having waited for 11 weeks while the customer tried to sell them before putting them up for mortgagee sale.
However just yesterday, realestate.co.nz reported that the average weeks to sell in Auckland is 21 weeks.  So really the expectation that 11 weeks was fair and reasonable is a bit week IMO.
The portfolio of Auckland properties sold at mortgagee sale for an average 20% below market value - perhaps a good indication of where the market is heading.

The featured case of a couple with four properties really shows how gauche they were about their risk . Then how about the bank that lent them that much where the buyer has an employment risk?  Both parties were equally stupid IMHO.
For the future the present holders of 95% mortgages in many cases have little idea how they would cope with a hike of 3% in their rates.

Its hard to know the couples exact circumstances - but I imagine there was a long period (more than 11 weeks) between them not being able to afford the full payments and the bank selling their house. Surely they should have sold it themselves if they wanted market value...

An interesting innovation - todays 90 at 9 pre-supplied with 19 comments from yesterday.

it's the roll on effect..Colin R....after a while the bad news is just an endless stream of  grey sludge .....so why not.....tum tee tum....followed by whistling.

They could improve "the look" by adding 24 hours to the comment timestamps.

Compound-interest.co.nz ?

Credit where credit's due PDK. 

Ain't debt de case, Uncle Ream-us?

Now you be sure tuh put yuh welcome Matt out  when yuh gits tuh fixin yuh disposition....or datposition as the case may be.

There's nobody there Colin.....the boss away,  they'll slope in say round tenish today , be gone by lunchtime, oh yeah this is all going to hell in a handbasket..!

so it's a net debt then?
Whose fault?

Love all...your serve.

ah, err ... my mistake. I have done today's edition by writing over the top of yesterday's. Made it very confusing - my apologies.

Thanks for pointing that out, I thought I was trapped in a groundhog day.

WTI has dropped but Brent is holding ground...

It's the TVNZ Pigfest contest..who can stuff the most in their gob...!
"State-funded broadcaster TVNZ has been accused of "income inequality", after revelations more than 10 per cent of its staff earn more than $100,000."

"Dam peasants...think they live in a democracy....sod them" 
"Secrecy surrounding the commercial interests of local authority councillors needs to end, the peak body for councils has told the government."

Fathead Guy rules!
"Relaxing health screening requirements for international students could lead to people infected with HIV and hepatitis being granted visas to study here, medical experts say.
Student visa applicants will be screened only for tuberculosis from July, unless they have other health conditions, and will no longer need to supply full medicals.
The onus will instead rest on applicants to declare their health conditions rather than on medical checks to detect diseases." herald.
"Immigration Minister Nathan Guy said the changes were aimed at "reducing red tape" and "making it easier for low-risk, high-value students to come to New Zealand".....
Well Nathan, you are now at the top of the list of idiots in the Cabinet...start planning your answers to explain the rise in reported HIV, Hep and STD along with a host of other costly diseases...