90 seconds at 9 am: Risk back in favour; Dow up; NZD up; strong AU jobs growth; Fonterra annouces very big ambitions in China

Here's our summary of the key news overnight in 90 seconds at 9 am, including news that there has been a marked turaround in sentiment overnight with the Dow recovering much of its recent loss and currently sitting just below the 13,000 level. The cost of oil is climbing, and other commodities are rising also. Gold has made a big jump in markets overnight, virtually erasing all the decline since the beginning of the month.

'Risk' is back in favour, and as a consequence the NZ dollar is back in favour. It rose alomost one full cent overnight and is almost back to its highest level since early March. To be fair, it has bounced around within a fairly strict range in that period and todays rise is not yet outside that range, but at this level it will keep a lid on the cost of imports and therefore tradeables inflation.

Across the ditch, yesterday's labour market news was surprisingly positive. Australia added many more jobs in March than was expected. Their unemployment rate was stable at 5.2%. However, most economists - and market pricing - are still picking a rate cut in early May. And there is more concern in Australia about the impact of a Chinese growth slowdown on their economy.

Overnight Moody's issued some analysis on the expected effect on corporate Australia of such a slowdown, and sees "a material adverse impact". We will know how fast the Chinese economy is slowing later today when Chinese GDP data is released for the March quarter.

Overnight, we also got data on market pricing for dairy prices and they showed small falls across almost all products, but especially cheese. This latest data runs counter to the previous Fonterrra auction price signal that recorded a small rise in dairy prices. Still, despite these latest numbers, dairy prices are holding at generally higher levels, although the high Kiwi dollar doesn't help returns.

Yesterday, Fonterra announced big ambitions to be a major player in China's domestic dairy market, a significant event for the company that you can read more about here ».

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.


Tower warns Global meltdown still hanging around ...    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1079...

Interesting....at least they see there are risks and comment on them. They see issues are still 6+months out, and think inflation is going to be an issue......so they are still in the musicla chairs game.....sounds a bit of gambling.......

Comment in the Telegraph, sorry tis along one and hard to link to,

3 hours ago


As I said in a previous post,  my father taught me at an early age that the best way to get to the bottom of things was to ignore everything anyone tells you.
 Do not listen to their explanations, he said, just look at their actions, and then work out the consequences for yourself.
When you begin to understand the consequences of actions, then you 
have no need to listen to any fine words that get trotted out, only to 
the extent that you would like to know how devious or much they are 
prepared to lie.
If ever there was a time to ignore every single word uttered by any of these hall witted bed wetting  mind numbingly incompetent fools then the time is now.
Lies deceit and more lies is all you will ever hear. Not a single word of truth will ever be spoken again regarding these events because to do so will mean instant death.
Deservedly so. 
For those who not still dribbling down their bibs, the sycophantic acolytes still mouthing their ridiculous and infantile garbage telling us how the problems are all behind us, and those not mathematically challenged and can actually add  2 numbers together without making a mistake, then simply look at the numbers, ignore everything that's said , do the calculations.
An asset is an asset, A value is a variable,  A rate is a variable, and a liability is a variable, that that can rise or fall.
Despite deeply corrupt and illegal practices that have been going on at the ECB, and every central bank in Europe, printing money under what was supposed to be the emergency only provision, hundreds of billions have been printed  and used by those governments  to prop up their failing banks and even pay government salaries.
In the end , they have no option, they will print because the ECB allows them to, and they will print because to not pay the salaries or pensions will mean immediate civil uprising, or thier utterly bankrupt banks will fail instantly and catastrophically.
But the markets already know that the currency is being debased daily this way.
Add all factors together,  but principally the main 2 factors from which everything else is subordinate,
First, Growth:- Is it possible to have growth in all the PIIGS economies with unemployment rising and already at such levels and the SME base that could provide employment so shattered and bankrupted that 30% have already gone, so can never  grow again.
Add in the fact that there is  not a single bank capable of financing these SME's growth even if they were still hanging on to life.
Which means just one thing, and one thing only. The debt trajectory can only ever get bigger, and it can only get bigger at an ever escalating rate. And an ever escalating cost.
And despite every lie and every statement made without a single exception, from every single greasy little trougher in Brussels, it is impossible, absolutely impossible to have the same or equal or even close, level of competitiveness between Germany and Greece, or Spain and Germany  or a dozen other combination's.
And that level of competitiveness is an absolute fundamental requirement if you are to compete and survive in an market.
And the only possible way to keep going is to have the ability to borrow endlessly, with no end in sight, to replace the  CAPITAL  you lose every day.
And the Capital you lose,..... That is the SME's that go bankrupt, the millions of jobs lost, the human capital, the loss of those peoples savings and pensions..
Its now gone and is still being stripped away daily by ever increasing bankruptcies and more and escalating job losses.
Meaning that every day, an ever bigger loan is needed to replace the productive output of that already uncompetitive lost capital.
And the there is capital flight. Each and every day, armies of accountants and bankers and lawyers are not as some may naively think, sitting around watching these events unfold in horror.  They are very busy indeed, working late into the night, planning carefully and acting with speed and precision and with expertise and knowledge that far exceeds the gratuitous stupidity and incompetence of the risible monkeys in Brussels.
They are very busy moving those assets  to safe places, writing contracts that convert euro denominated deals to dollar deals, contracts that limit liability contracts that take away risk and eliminate risk on every asset they  can find.  And of course the wealthy, in each and every one of these countries, who didn't get that way by being stupid, who also understand all too well what is going on.
And their wealth and cash is being inevitably and persistently being liquidated   and moved to safer havens. As fast as can possibly be moved.
But "
David Owen from Jefferies Fixed Income said that the ECB pushes other 
investors "down the food-chain" instantly when it buys Spanish and 
Italian debt, raising the loss ratio if either country slides into a 
Greek-style restructuring."
and then says 
"contortions caused by ECB intervention would not be an issue if 
the bank acted with force majeure and conviction, as the central banks of 
the US, UK and Switzerland have."
Utter garbage that last sentence.
Europe is not the US the UK or Switzerland who can and have and will devalue.
Even as the EU devalues every day with its ponzi scam of printing more and more money,  and Ponzi scheme it is, and ever was thus from its inception,  it only means they all devalue  together making the stronger more competitive in the world, and the PIIGS even less competitive against Germany.
But of course more QE  chucks a shed load of money at banks to waste on govt bonds, that cant be paid and the cost will rise as more capital is lost as rates rise again and the cycle to hell continues.
 But they can make more money mopping that QE up and the lawyers and accountants can have another feeding frenzy converting to safe haven assets, until it has to start all over again.
The end will be one of only two possible outcomes.
Print money for ever  or break up the Euro.
Hyperinflation as ever greater and greater quantities of ever devaluing  euros are printed, Germany greatest fear, or the euro will explode. and be no more.
And every day the inevitable is delayed has one very simple consequence. The debt gets bigger, and the Capital available, the jobs and small businesses to power future growth gets decimated, and so the the need for ever escalating borrowing or money printing.
And for those who do not understand these matters,  anyone anywhere with the knowledge and ability and the means can go and short the euro, can short euro contracts and can use any number of available means to extract value from the ongoing situation.
I have shorted the euro all the way  down from just under 1.40 and with the leverage afforded have made enough to buy a mansion and still have enough change to live comfortably for the rest of my life.
And it all came from Europe , from the ECB and the European banks to be precise.
Now imagine what the real heavyweights and wall street banks are doing.
One thing mathematically certain, they carry on this course, I make another fortune, the smart people will make money and the lying useless criminals in Brussels will lose every European everything they have  for one simple reason,.
Their stupendous grotesque bloated ego's and their sheer grubby corruption and grasping need for power.


As I said in a previous post,  my father taught me at an early age that the best way to get to the bottom of things was to ignore everything anyone tells you.
 Do not listen to their explanations, he said, just look at their actions, and then work out the consequences for yourself.

Hi Andrew - this guy needs to get an education in the art of logic .

On Black Friday amid all the unfolding doom, it may be worth remembering that even under advisement of self professed experts not to proceed.......the world will turn .
Apologies up front for the Huge Pavlovabits style billboard.
Man will never reach the moon regardless of all

future scientific advances."


 Dr. Lee DeForest, "Father of Radio & Grandfather  of Television       

"The bomb will never go off. I speak as an expert in explosives."

                Admiral William Leahy , US Atomic Bomb Project

               "There is no likelihood man can ever tap the power of the atom."

                Robert Millikan, Nobel Prize in Physics, 1923             

"I think there is a world market for maybe five computers."

                Thomas Watson, chairman of IBM, 1943

"I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year."

                                The editor in charge of business books for Prentice Hall,  1957

"But what is it good for?" 

 Engineer at the Advanced Computing Systems Division of IBM,1968, commenting on the microchip. 

"640K ought to be enough for anybody."

    Bill Gates, 1981

This 'telephone'has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us,"-- 

                Western Union internal memo, 1876. 

"The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?"

 David Sarnoff's associates in response to his urgings for investment in the radio in the 1920s. 

"The concept is interesting and well-formed, but in order to earn better than a 'C,' the idea must be feasible,"

 A Yale University management professor in response to Fred Smith's paper proposing reliable overnight delivery service. 

                (Smith went on to found Federal Express Corp.)

"I'm just glad it'll be Clark Gable who's falling on his face and not Gary Cooper,"

Gary Cooper on his decision not to  take the leading role in "Gone With The  Wind."

"Heavier-than-air flying machines are impossible,"

                Lord Kelvin, president, Royal Society, 1895.

If I had thought about it, I wouldn't have done the experiment.The literature was full of examples that said you can't do this,"

Spencer Silver on the work that led to the unique adhesives for 3-M "Post-It" Notepads

"Drill for oil? You mean drill into the ground to try and find oil? you're crazy,"

Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in 1859.  

"Stocks have reached what looks like a permanently high plateau."

                Irving Fisher, Professor of Economics, Yale University ,  1929. 

"Airplanes are interesting toys but of no military value,"

  Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure  de Guerre , France ..  

"The super computer is technologically impossible. It would take all  of the water that flows over Niagara Falls to cool the heat generated by the number of vacuum tubes required."                Professor of Electrical Engineering, New York   University

"I don't know what use any one could find for a machine that would make copies of documents. It certainly couldn't be a feasible business by itself."

 the head of IBM, refusing to back the idea, forcing the inventor to found Xerox.

 And last but not least... 

"There is no reason anyone would want a computer in their home."

-- Ken Olson, president, chairman and founder of Digital Equipment  Corp., 1977

Whew! hope that worked.....blasted paste.



Europe’s future is not up to the Bundesbank
By George Soros
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/f7ac05c8-82fa-11e1-ab78-00144feab49a.html#ixzz1rrpNNz3e

Eachran | April 12 11:17am | Permalink
Well, I wasnt going to comment but I changed my mind.

To read people writing about countries in Europe as if they were states is complete nonsense. Not only is Europe a collection of quasi-states but the implementation of the four freedoms makes it more likely that some sort of Federation will arrive sooner rather than later and probably immediately after the introduction of a proper single currency.

Germany is not the same Germany as of twenty years ago and neither is France nor any of the other members of this group that actually provides to the rest of the world a living example of successful inter-"state" cooperation in action.

Once you allow people capital goods and services to flow then the landscape changes. It changes as clearly as the landscape changed in the UK during the industrial revolution and more recently the rise of the City as one of the world's major financial centres.

Goodness me, some 300k people from France now live and work in London, Germany and France have been running a programme of Government cooperation for some time now, people migrate to where they think the streets are paved with gold, Spanish youngsters search for work in Toulouse, "mixed" marriages are becoming normal and on and on.

You cannot put back the clock it has been running for too long and the only way is forward.

For me it is almost incredible that commentators and posters still talk about "growth" in developed countries when the chances of that happening at a level as in the past is just about zero as a consequence of globalisation.

For me it is almost incredible that people still talk about the benefits of free exchange rates when in modern interconnected economies competing in a globalised world the only benefit from free exchange rates is to be able to compete on price at the bottom of the pile. So you want to compete directly with India and China do you? You want to be nations of baseball cap and running shoe makers.

Granted, being always at the top end is difficult and even niches eventually get overrun but that takes time and requires the developing nations to keep developing at breakneck speed, difficult to do that.

I am not pessimistic about Europe's future quite to the contrary but certain basic things need to happen first : everybody needs to understand that in a globalised world there will be no growth to speak of with obvious implications for public finances, the social models need to be modified (complicated issue that), our money currencies need to be secure and that means fixing the banks but not with incendiary LTROs, I mean really fixing the banks today and not swanning around in the hope that things will take care of themselves because they will not.

As for Mr Soros's proposals there is nothing new there. The terrifying prospect for the future really lies with the US and UK when the Euro becomes the preferred reserve currency.

We ain't seen nothing yet.

It might be the Euro Jim ...but not as we know it...................hmmmmm I don't think so A.J.

PIMCO....bottom line..
It is also about the growing risk of collateral damage and unintended circumstances. 
.Risk.......Risk...? collateral damage is all over the ground from the U.S. to the E.U....U.K...Risk...? did he not want to offend the hosts....there is no risk. It is happening and being transfered that quickly down the esophageal tract of consumption it's coming back to choke the Ba$*ards.

So all means what for kiwis on struggle st in the mortg belt?

Jeez a bit less cut and paste please; the links will suffice.

More Tablet use - harder to cut & paste