Here's my summary of the key news overnight in 90 seconds at 9 am, including news the New Zealand dollar has fallen below 80 USc for the first time since January 17 overnight after fresh economic data raised fears about the US, European and Australian economies.
These fears of slower growth drove commodity prices lower and undermined those currencies seen as most exposed to commodity prices.
Weaker than expected employment figures in New Zealand yesterday also weakened the currency and drove wholesale interest rates down to near their November lows. Two year swap rates, which are the basis for fixed mortgage rates, fell to their lowest levels since late November. Interest rate markets are now pricing in a 25 basis point cut in the Official Cash Rate by early next year. See more here on moves in wholesale interest rate markets yesterday.
A measure of the services sector in the United States, the biggest part of the world's biggest economy, was weaker than expected, Bloomberg reported.
Traders are watching for signs on the US economy ahead of key Non Farm Payrolls figures for employment due later tonight New Zealand time.
Yesterday data for the Australian services sector showed it contracting at the fastest rate in three years, AAP reported.
Also overnight, the European Central Bank's President Mario Draghi also warned of a deterioration in the outlook for the European economy and said he was open to more monetary stimulus, despite leaving the key European interest rate unchanged at 1%, Bloomberg reported.
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29 Comments
ETFs – The Next Accident Waiting to Happen?
http://www.golemxiv.co.uk/2012/05/etfs-the-next-accident-waiting-to-hap…
"Traders are betting the central bank may cut the official cash rate from its record-low 2.5%, pricing in a reduction of 3 basis points in the coming year, according to the Overnight Index Swap curve" http://www.nbr.co.nz/article/kiwi-slides-3-month-low-after-unemployment-jump-wb-117995
Democracies can stop predatory financiers – Argentina and Bolivia are showing how
But we should see both instead as responses to the failures of privatisation and its toxic connection to complex forms of financial speculation.
In both cases Spanish multinationals had prioritised the repatriation of dividends over investment. This indirect form of asset stripping was driven by the priorities of bankers in London and New York. Behind the Repsol-YPF affair, in particular, was something very close to the sick capitalism that caused the 2008 crisis: high-yield, high-risk assets, sliced and diced via complex derivatives.
http://www.guardian.co.uk/commentisfree/2012/may/02/democracies-stop-pr…
Andrew
Doesn't that sound familiar, NZ Rail, our line companies, anywhere you get finaniciers invovled in an high value asset based business you will find the temptation to increase the 'income' by neglecting the asset too tempting
Especially if the asset is so critical that when you screw it up you just hand it back to the government whingeing that its 'unprofitable'
Neven
Fonterra + TAF = ETF & synthetic’ ETFs.
I have often thought the same thing
I suspect that farmers will buy shares in the TAF and therefore will not have shares in Fonterra.
If one of the TAF Market Makers goes bankrupt(eg Global Financial Crisis part 2), the TAF with all their sharefolders funds might disappear into thin air.
RON PAUL SURGING?
Of course, no mention of the fact that Ron Paul is sweeping US state delegates all over the place. I don’t expect NZ media to have the foresight to pick up on it, but Mainstream US Media is refusing to admit that he has closer to 400-500 delegates and rising (as opposed to the 80 or so they list him with), and a nearly certain name on the candidate list at the the GOP’s Tampa Convention.
When determining root causes to the Global ideology "gone wrong" a revision in the obsession with the Mantra, Growth Springs Eternal is needed.
Stability ..........Growth ,which is the horse and which is the cart...?
The continued debt fueled pumping of trillions into the E.U. in order to rekindle "Growth" has done nothing to even "Stabilise" the Economy. Ditto in the U.S.
Individual sub economies within the E.U. have lost all power to even attempt to stabilise their situation while under the direction of those who insist on growth before stability.
And the words not spoken, are longing to be heard.........."That'll do PIGS,..That'll do."
Another perspective..? I'm sure , burn the witch would be the response , but I think it truly worth more consideration than is being given in the Global context.
On our own home front we have this person hellbent on foreign fueled growth injection before showing any capability of managing the economy that is on the table in clear view.
Your getting ahead of yourself there John Boy...but is that not just the nature of a speculator..?
http://mobile.bloomberg.com/news/2012-04-13/deflation-isn-t-always-so-bad-just-ask-japan
Have a vision PM or you and your underperforming ministers are going to be sacked – in 2012.
Most government in the world are talking about growth, increased exports and employment – competing on a large scale worldwide – while demand is shrinking – a scenario leading into disaster.
In the current worldwide environment securing a NZunemployment rate below 10% is vital. So - why on earth is our government not talking about reducing quality imports. With the right incentives of the government many of these imports could be manufactured by NZcompanies. PM – this would create 170’000 new and really decent jobs you are looking for and make sure, next to many more advantages NZ will remain as a country with low unemployment rate in the future.
http://www.teara.govt.nz/en/government-and-industrial-development
From ABC TV this morning in Australia : There are 2 million small businesses registered in Australia , and they employ a total of 5 million people . This is 40 % of the Australian workforce ........big businesses , by comparison , employ just 23 % of the total work pool ....
...... and small business owners were polled on their opinion of the current federal government : Only 7 % thought that the Gillard government was positive for business ; but over 40 % of small business owners thought the current government to be detrimental to business progress .....
Many in retail are blaming the looming carbon tax for consumers' battening down the hatches , locking up their wallets & credit cards ...... consumer confidence is rock bottom ...
Julia , is,as they say GBH...gone!( in that high pitched tone)...trouble is the return of Rudd would only serve to demonstrate just how far out of touch the ALP is with everyday Australia.
The poll is more likely an indictment on the performance and policy of the party as a whole.
The big caution here is the number of Independants that are favoured by the SBO's and Joe lunchboxes....not guaranteeing the Liberals any real certainty on policy implementation....could get a bit hung up by it in fact.
.... let us not go back to the Rudd family , Count ........but some folks reckon that Bill Shorten would be an ideal replacement for Julia ..... and the Gummster is impressed by the calm level-headedness of Craig Emerson ......
There are alternatives , as some ruddy buggers say ...... more or les .......
Appropos nothing above. Strewth. My partner has a house in Seaford about 40 minutes south of Melbourne. House and contents insurance is (was) with BUPA. She has just been notified that the annual premium is going up from $650 pa to $5000 pa because it is within 500 metres of a creek. Howzat?
Holy running water iconolast......that is just criminal, BTW ,I used to reside (flatting) in Seaford a loooooong time ago....a very beautiful girl ....a looooooooong time ago . , aaaah, still,.....hope she moved away from the creek.
Wonder what the insurers will come up with if your within 500 m of a ecalyptus reserve, or a known arsonist lives in your hood.
Heard an entertaining description of the Labor leadership catastophe as a black hole, meaning that it sucks in anyone who gets near it and there is no escape. The problem was defined as being only a complete nutter would take the job on given the impending electoral disaster which means they have a choice between Julia and a nutcase.
It does look as though they will have an election soon which would be good for NZ as we cant really afford Australia to be in its current state of paralysis, as amusing as it all is from over here.
John Key's real character begins to show through....and it aint a pretty sight!
"Former prime ministers and their spouses are collecting tens of thousands of dollars in perks – and a new bill being led by Prime Minister John Key will lock them in.
Figures obtained by the Sunday Star-Times show former prime ministers such as Helen Clark and Jim Bolger collect near the national average wage each year in annuities, and pocketed annual increases of up to 4.75 per cent on their benefits.
On top of annuities, eight former prime ministers or their spouses have also spent more than $330,000 of taxpayer money on travel over the past three years.
The benefits date back to the recommendations of a royal commission that reported nearly 50 years ago.
Rather than being scrapped, however, a bill being led by Key will lock them in place. Key's Members of Parliament (Remuneration and Services) Bill includes changes to the way MPs and ministers are given entitlements. Instead of the Speaker deciding on MPs' travel and accommodation allowances, most tasks will go to the Remuneration Authority.
But entitlements for former prime ministers who have served at least two years will not change."
http://www.stuff.co.nz/sunday-star-times/latest-edition/6867688/Key-to-lock-in-PMs-perks
It's hard to know who is worse, those that engage in such egregious selfserving behaviour or the voters willing acceptance, as though some of the largesse might rub off.
Increasingly, I blame the voters, including myself for a lack of diligence even when I knew the entitlement mentality as far back as 1998 was enveloping society.
Harsh measures are required because as others have noted financing these emoluments with borrowed capital leaves an untenable legacy.
A strong legal case has to be made to pay for work undertaken at the time - not thereafter, other than assistance in times of hardship.
Key's actions on this matter mark him out as a right shee yit. Shearer has nothing to offer but more Labour lies and shabby govt but come 014 I have a feeling we will see the end of Key and National. "The govt that never was"
Failed PMs booted out by voters should not be receiving any perks and certainly not taxpayer funded travel to anywhere in the world....and that goes for their partner too.
"Governments from both sides of the spectrum have tried to increase domestic savings, which would reduce the reliance on foreign borrowing and, in theory, reduce interest rates in the long run. The National-led Government's moves to make rental property investment less attractive by reducing the ability to claim depreciation on buildings was one of the attempts to break this cycle." Bernard Hickey...The herald
They sure have tried to look like they are trying to increase domestic savings....big difference right!
In reality they are concentrating on protecting the property values as per instructions from the owners of NZ inc...the parasites.
No effort made to strangle the accommodation allowance landlord benefit scam is there!
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