90 seconds at 9 am: US slipping back into recession; China admits struggles with growth; criminal charges coming for Libor fixing scandal; Dow up; NZ$1=79.5 US cents

90 seconds at 9 am: US slipping back into recession; China admits struggles with growth; criminal charges coming for Libor fixing scandal; Dow up; NZ$1=79.5 US cents

Here's my summary on on the key news over the weekend in 90 seconds at 9 am, including news of strength in the US car market and falls in the price of petrol there. There is also news of rebounding economic fortunes in some States. But these gains are specific or regional and not enough to lift overall US economic performance.

In fact the latest measure of American consumer confidence shows gloom, and some are noting that the country has already fallen back into recession. Expect the drumbeats for QEIII to grow louder, although it is clear most Fed members don't think such an approach will have the desired impact.

China’s Premier Wen Jiabao has also said he expected his country's woes will continue for some time. China is easing taxes for foreign investors in a bid to encourage more direct investment.

Despite these negative sentiments, the Dow finished up strongly on Friday, and the oil price also rose.

Back in the US, there are important reports that authorities there are preparing criminal cases against banks in the Libor rate fixing scandal - and not only against Barclays; a range of banks are being investigated for criminal violations. There is more on this story in our Top 10 links which will be published later this morning.

The NZ dollar starts the day at 79.5  US cents, 78 AU cents, and 72.3 on the TWI. Gold is at US$1,590 per ounce, and oil is rising, currently at US$87 per barrel.

Tomorrow we will get New Zealand consumer price inflation data, but we are not expecting any surprises there. Actual inflation is dormant, and that is backed up by our own weekly grocery price monitoring. The only area to watch will be the non-tradables sector, especially government charges.

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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 Personaly from the vibs im getting over here, people are starting to focus on paying off debt. Whenever Im at a barbeque etc., most of the conversation is about getting debt down and as fast as possible. My garage tells me people are putting off buying new cars while they focus on paying down debt. It's most likely a middle class phenomenon. It pays not to forget that there is still a lot of wealth in the States.
 Welfare is becoming a big problem but not one they have on their own.

Was the petrol price rigged too?

Motorists may have been paying too much for their petrol because banks and other traders are likely to have tried to manipulate oil prices in the same way they rigged interest rates, an official report has warned.

Ta ........A.J. ...worth the read as always...
David C.....your thoughts,,? is the U.S. sliding back into recession....or stalling deflation.....the Drums  for QE will beat  presto' all day long, like a baby with a rattle tied to the hand while having a tantrum...........but ......it (QE).....does ....not ....work...does it .
Dear Fed please dispatch another box of bandaids as my Bypass wound has started leaking a little more than I'm comfortable with....could you also the last dispatch manifest as I'm sue you sent quaaludes instead of amphetamines .....
Yours in need The Free Market.

"(QE).....does ....not ....work...does it"
Doesn't seem to be working, the intention being to drive interest rares down (working) and, therefore, getting folk to go on another borrowing binge (not working)
Are these federal reserve clowns that bloody dumb they can't see that people don't want more debt and are saving more because:
They already have enough/too much debt.
They need to save even more for retirement since returns are half what they were.
They can pay down debt quicker since they're paying less interest.
They already have a garage full of useless crap.
Houses are cheap so you need less debt to buy them.
They're scared of loosing their jobs.
They're getting older (proportionately) - retirement is just around the corner for more.
Deleveraging is a really positive thing, let it happen. If our banking system can't handle the perfectly normal result from excess debt then we need to change to one that can.

Yup ....he haircut....now!

Damn right! You are on fire KD

This sums up my feeling on QE:
"Bernanke has bought most of the bonds from the banking system. This is a bad way to boost the broad M3 money supply. You have to go outside the banks to gain traction, buying from pension funds, life insurers, and the general public. Don't say QE has failed in the US. It has hardly been tried."
They need to print, the real question is the manner in which they do it IMO. Ambrose then talks about the need for massive stimulus to drive up GDP but the way GDP is measured can be influenced by price rather than production. They will print to do it because they don't care how GDP is raised as long as it looks good on paper.

well done to the accomm sup guy he was right. Now this morning we have labour saying it must end this sudsidie to landlords, well will they buy or build $1.5 billion of houses a year. as National have chosen to rebrand themselves from sensible finance custodian to assert selling 1% ers at the same time we have a back lash building labour will shoo in as long as they stay quietly in the middle. could be good for builders 

I think the audience at the World Economy Conjuror's show is beginning to see through the smoke and mirrors trick and is about to walk out and demand their money back. Fear not, though, I have a brilliant plan once for after that - Skyhooks

8 years!!  That ain't a dead cat bounce. More like a Red Bull bounce.