90 seconds at 9 am: US manufacturing unexpectedly shrinks for first time in 3 years; Euro-zone jobless rate at 11.1% and factory output contracts; NZ$ at record high vs Euro

Here's my summary of the key news overnight in 90 seconds at 9 am, including news US manufacturing output unexpectedly contracted in June for the first time in three years.

The ISM index of US manufacturing activity was 49.7 in June, which was below the lowest forecast from economists. Anything below 50 indicates contracting activity and the index showed orders, output and exports were all falling.

See more here at Bloomberg.

Meanwhile, factory output in China and Europe also contracted in June. The HSBC/Markit survey of Chinese factory output was the weakest in 7 months, while a more official measure showed just marginal expansion at its weakest in 7 months. See more here at Bloomberg.

In Europe, the euro-zone unemployment rate rose to 11.1% and factory output measures across the euro-zone fell sharply. Spanish unemployment rose to 25%. See more here at Bloomberg.

However, European stocks gained and the Dow recovered early losses as the focus switched to the liklihood of more stimulii from both the US Federal Reserve as early as August 1 and an expected rate cut from the European Central Bank on Thursday.

The Dow closed flat and appetites for riskier assets remained in place. The New Zealand dollar hit a record high vs the euro of 63.94 euro cents this morning and was over 80.4 USc in morning trade.

However, the European summit euphoria from Friday is fading somewhat as Finland and Holland questioned whether rescue funds should be used to buy Southern European bonds. See more here at BBC.

Meanwhile, the LIBOR scandal in London deepened as the chairman of Barclays resigned and the government launched a parliamentary inquiry into banking. See more here at BBC.

And finally, NZ Herald reports a home buyer in Auckland bought a house a year ago in Orakei for NZ$590,000 and has just sold it for NZ$846,00, representing a 43% increase in price. Capital gains may have been higher due to leverage. It was all tax free.

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The real victor in Brussels was Merkel
By Wolfgang Münchau

Do you think its time for Bollard to twink those interest rates again?
  just a little, a peck, a smotch, like you're kissing your sister, i said a peck you fool.

Bubble? Get outta town! They're not making land anymore, so of course this place can leap by a third of its own value every year compunding into infinity. I'll go next, then you can buy it off me for (say) 1.4 million next year. There must be a vein of gold or undiscovered oil field resting beneath, so I have no concerns about getting my price. And nor should you after me. This will go on forever.
As to the rest of the worlds deflation? Pfft. That's a preposterous notion once they see what is happening here across the AKL isthmus. We are going to the moon and our gushiness will drag the rest of the world from its quagmire, because it all revolves around us of course. Didn't you know that?
PS: "It's different this time."

The fact there are no regulatory barriers in place to help people not to undertake greater fool actions is unconscionable.
There is little point in debating the means of correcting current A/C deficits when small plots of worthless, non-productive land reflect the wealth of the nation, for the majority.
Priorities matter.
Lets hope the property insurance moguls are up for the same uptopian laissez-faire risk extension schemes. Transferring excessively high re-insurance premiums offshore enriches the FIRE sector but few others.    

I have one thing to say. Celtic Tiger.

Oh yeah. And anybody who isn't on board and fully drinking the kool-aid suffers from a debilitating character trait commonly known as "passive aggressive".

The trick is to have your fingers in all the pies, for example, have a 1/3 or 1/4 share in a property and then the balance in stock and bonds, alternative investment etc, that way all of your bases are covered, just remember to buy low sell high. Thats how I roll

@idlebumski - Similar aspersions were cast upon the solvent souls who assiduously avoided finance company deposits. Except Canterbury Finance, of course, where we collectively paid the price for the as yet unnamed, entitled few to escape unharmed. 


the Landlords are onto it

Migrant says rent similar to London
p0sted Today, 05:04 PM

In 2005 was the top of the short term real estate bubble within the long term real estate bubble...The top was dumping real estate into strength and taking the yield from that and dumping it into the stock markets which began hyperinflating...of course once the speculators reached their maximum potnetial to bid up the markets...the top dumped equities and bought bonds.

When real estate begain collapsing in the late 1920's the top dumped real estate and bought equities

Of course once the speculators reached their maximum potnetial to buy equities and that mania ended...the top dumped equities and bought bonds.

Japan starting up its nuclear reactors again. Wonder what that will do to the price of oil, or is it already priced in? Big disparity in estimates of numbers who turned out to protest againt it. 20K vs 180K

They have few options really, cant afford to import it and dont have the plant to burn it in anyway.
I wonder how long Germany's will stay off as well....a quiet reversal maybe.....time heals and all that crap...

Reliance on Russian gas etc not a sovereign option.

Looks like the occupy group are up in arms about the Trans Pacific Partnership.
"The claimed purpose of TPP is to promote development and create jobs. However, this meeting is in fact one of the final conclaves to secretly negotiate the economic structural adjustments necessary to appease the world’s largest multinational banks and multi-unit corporations."
"The essence of these talks is to privatize natural resources (despite the wishes of the world’s indigenous peoples;) restructure each country’s trade, labor, environmental, and finance laws; and reduce or eradicate social services to the people."
Privatise natural resources...  Hey, are they talking about us?
More at http://occupywallst.org/

Minister Joyce – in the current economic environment nations, which aren’t manufacturing for their own use, but import most everything in the billions are doomed.
…and PM – there are still no decent jobs for the wider NZpopulation.

Muldoon named it "Import Substitution". Since 1958 'Black Budget' we have had this 3 times.
Lets get on with it