90 seconds at 9 am: China stimulus?

90 seconds at 9 am: US stocks up and NZ$ back over 76 USc on talk of Chinese economic stimulus and hope Europe can save Greece

22nd May 12, 8:53am by Bernard Hickey

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Chinese Premier Wen Jiabao raised the prospect of government stimulus to boost growth in the world's second largest economy, which is also Australasia's largest trading partner.

Premier Wen said China needed to focus on stabilising the economy and made no mention of controlling inflation pressures, which is a significant departure from his comments over the last year about slowing down the economy and controlling inflation. See more here at Bloomberg.

Economic data in recent weeks has shown a signficant slowdown in China. Markets are hoping China can repeat its miracle rebound of 2008 and 2009 when it invested heavily in infrastructure through its local governments, boosting demand for coal and iron ore from Australia.

However, many believe China cannot repeat that stimulus again because of high local government debts, a slumping housing market and political uncertainty around China's once-in-a-decade leadership tranition later this year. See more here in my interview with New Zealand based Asian economic strategist Peter Redward.

US stocks rose 1.6%, boosting demand for 'riskier' assets such as the New Zealand dollar, which rose back off 6 month lows to be around 76.5 USc this morning. See more here at Bloomberg.

European stocks rose around 1% overnight, helped by fresh talk from German and French finance ministers that they would do whatever it takes to keep Greece in the euro. Also, various proposals emerged for a Euro-area bond to stabilise Southern Europe's bond markets. See more here at Reuters.

Meanwhile, Facebook's shares fell more than 10% on its second day of trade, disappointing many new investors and raising questions about the IPO process and whether Facebook left too little on the table. See more here at Reuters.

JP Morgan also announced it had stopped a share buyback programme. This followed news losses from its disastrous synthetic credit trade had risen from US$2 billion to over US$5 billion. See more at FTAlphaville.

No chart with that title exists.

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8 Comments

by Colin | 22nd May 12, 8:59am 1337633994

Only Reforms Can Revive Growth - Andy Xie

http://english.caixin.com/2012-05-17/100391214.html

by speckles | 22nd May 12, 9:11am 1337634709

Told ya, 2 billion na, 5 billion na go higher...

by Andrewj | 22nd May 12, 9:34am 1337636060

Facebook for dummies

http://www.zerohedge.com/news/facebook-ipo-post-mortem-dummies

by Andrewj | 22nd May 12, 9:41am 1337636482

JPMorgan suspends $15bn shareholder return US investment bank JPMorgan has cancelled up to $15bn (£9.5bn) in share buybacks as it struggles to deal with mounting fall-out from the huge trading losses built up at its London office.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9280586…

JPM: Watch The Duplicity!

http://market-ticker.org/akcs-www?post=206256

by Andrewj | 22nd May 12, 9:39am 1337636369

One chart is all it takes to prove a full-fledged European bank run on the banks is well underway in the Club-Med countries and Ireland.

http://globaleconomicanalysis.blogspot.co.nz/2012/05/full-fledged-europ…

by steven | 22nd May 12, 9:42am 1337636536

Brilliant link thankyou...

regards

by waymad | 22nd May 12, 9:49am 1337636975

Re Europe bank run: guys, the smart money walked quietly out the tunnel under the drum riser months ago. What Mish sees is simply the audience realising that the band looks a leetle - shall we say - thin....and running for the door they came in.

RIP 'Duck' Dunne, BTW.

by Alex Tarrant | 22nd May 12, 1:29pm 1337650159

Foreign charter vessels to be reflagged

The Government today announced it is to require reflagging of foreign-owned fishing vessels operating in New Zealand waters to address labour, safety and fisheries practice concerns.

Primary Industries Minister David Carter and Labour Minister Kate Wilkinson say foreign-flagged fishing vessels will no longer be able to legally operate in New Zealand waters after a four-year transition period.

“The Government's decision sends a clear message that New Zealand is serious about the fair treatment of fishing crews, the safety of vessels and its international reputation for ethical and sustainable fishing practices,” say the Ministers.

Today’s announcement follows the Government’s decision in March to act on a number of recommendations of the Ministerial Inquiry into Foreign Charter Vessels (FCVs).

“Reflagging will further strengthen compliance with New Zealand laws and provide more transparency around the operation of foreign-owned vessels,” says Mr Carter.

“We are already moving to strengthen monitoring and enforcement of FCVs, including placing an observer on all FCVs fishing in New Zealand waters.

“The Government continues to welcome foreign charter fishing vessels operating in New Zealand waters, but they must meet our requirements and our standards,” he says.

Labour Minister Kate Wilkinson says once vessels are flagged to New Zealand, the full range of New Zealand law, including employment relations and workplace health and safety law, will automatically apply and be enforceable.

“Reflagging will provide greater protection to the crew as they will be employed by a New Zealand-based party under a New Zealand employment agreement.

“If breaches of labour law occur – such as underpayment of wages or illegal deductions or breaches of the Code of Practice, the Department of Labour will be able to investigate them and take action. Maritime New Zealand is responsible for investigating any unsafe workplace practices.”

The Ministers say foreign crews will be protected during the four-year transition period with stronger monitoring and enforcement, including tougher independent audits of the New Zealand charter parties, safety monitoring on vessels and increased and enhanced on-board observer coverage.

“The transition period will also enable the fishing industry to adjust to the new regime. The Government will work closely with the industry to help facilitate this, particularly in regard to recognition of foreign crew qualifications,” the Ministers say.