90 seconds at 9 am: Britain back in double dip recession; US new home sales fall unexpectedly; German business confidence falls more than forecast; NZ$ at 78.8 USc

Here's my summary of the key news overnight in 90 seconds at 9 am, including news British GDP fell 0.7% in the June quarter, which was worse than the 0.2% fall economists had forecast.

This follows a 0.3% fall in the March quarter and drags Britain back into a double dip recession as it battles a sharp slowdown in the neighbouring euro-zone economies and as its own severe budget tightening slows the economy.

The International Monetary Fund called on Britain to consider easing its budget constraints. See more here at Bloomberg.

Meanwhile, in the United States new home sales fell unexpectedly in June from a two year high to their lowest level since January. See more here at Bloomberg.

In Germany business confidence fell in July by more than forecast to its lowest level in more than two years as the growing euro-zone debt crisis undermines activity. See more here at Bloomberg.

However, the euro rose on talk the euro-zone rescue fund may be given a banking license, which would allow it to borrow from the European Central Bank and then use that money to bail out Southern European governments and banks. See more here at Bloomberg.

But US stocks closed flat, erasing earlier gains made on hopes the US Federal Reserve will announce a third round of quantitative easing as early as next week. Apple shares slumped after its results were weaker than forecast as iPhone buyers held off in expectation of the launch of the iPhone 5. See more here at Bloomberg.

In China, the International Monetary Fund has warned the worsening euro-zone crisis is a key risk for China's economy. See more here at BBC.

All of this news about a synchronised slowdown in the global economy, with the euro-zone debt crisis worsening a slowdown in China and further weakening growth in America is driving investors to safe have bond investments, further lowering yields and building expectations of more interest rate cuts and money printing by central banks. This all strengthens the case for interest rates staying lower for longer in New Zealand as the global economy slows and the Christchurch rebuild only slowly gets going.

The New Zealand dollar was solid at 78.8 USc this morning ahead of the Reserve Bank's decision on the Official Cash Rate due at 9 am. Economists are unanimous in expecting the Reserve Bank to leave the rate on hold at 2.5%. They do not see it increased until March of next year, or possibly not until June.


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Well, I'd go into 'bunker mode' if I had folk like Hughey shafting me all the time, while I was trying to do the best for the folk who elected me, while doing duty to my statutory obligations, and coping with what Mother Nature has thrown at me.
It's a sick joke, when the folk who cause to stance, crow about those who have to take it. Some folk have no conscience, no ability to learn, and are consequently less than useless in social terms. You just have to batten down and do what you have to do, ignoring the kind of idiocy that put up the French nonsense link.
Take a year off, Hugh. Do some thinking, with a bit of perspecxtive. I'll give you a day, if you get brave enough.

This is hardly surprising, councils are staid slow moving inefficient organisms ill equiped for rapid change, you cannot get a slug to sprint no matter how loud you yell at it!

Or like I have said to Hugh before, you can chance the chief slug but it is still a slug. In fact you could have a clean out and get all new slugs, but you still have a slug. You want different results you need a new way of operating not a new slug :-)

If you are on Facebook Hugh, check out the Christchurch Log Burner Action Group. I have spoken to one of the guys leading the charge and he is pretty committed to making sure heads role. Seems there is some dishonesty involved in the whole emission vs health effects thing.

Hugh whilst I agree the CCC needs a new broom from top to bottom.
Do you have the necessary competent replacements ready?

With all due respect Hugh I think that is being sum what presumptuous. Good people often need to be coached this is in no way interferring with democracy.. In the past the process has been somewhat managed to a degree until both community and the business community stepped back leaving a vacuum for a bunch of self appointed egotists to step in.

….hmmm and gold is up overnight by more then US$ 30.- p/oz - it is now US$ 1’604.

Kunst - I bet David Chaston doesn't mention that increase.

.....but then David could be the biggest "Gold-dealer" in NZ - who knows ?
Not unusual - people make funny comments about their passion.

".....but then David could be the biggest "Gold-dealer" in NZ - who knows ?"
Then why is he always writing articles about the price falling?

Andy - not unusual - people make funny comments about their passion. ;-)

The problem with literary arts is that if you want to get stuck in and deconstruct them it is actually quite easy. Derrida would have a field day with Bruckner. I prefer physical terms like EROI, where the political content is less influential, although sadly not absent.

As stated: not a fact or a figure in sight.
The writer is a little like Hugh - I can't possibly be wrong, so someone else must be to blame. Council, bureaucrat, greenies, whatever, it just can't be me.
It's not to do with left, right or green, Hughey. It's to do with physics, geometry, maths and fact.
2pm tomorrow, is the first of this year's series oF EMAN seminars (Energy Management, Physics, Otag Uni). Why don't you come along? Won't be emotive, I'll give you the tip - investigation of truth never is - but you might learn something.

Did you see the comment the other day by Rockman on theOilDrum saying that Houston is a horrible city (one complaint was about shopping malls that are so large they have buses running from the carpark to the door where you can hire a golf cart to get around), maybe Hugh could convince him otherwise? hell what does he know he only lives there.

I've got a friend just back from commuting across the border (sleeping in Texas, working in Mexico.
No prizes for working out which firm.
His pix were saddening - there is no way they can turn that oil-dedicated endless flatness around. Skyscrapers just behind the sand-dunes, bee-less monocultures to the horizon, sprawing suburbs slidin past the plane wing forever. Kunstler was right.

I read that and he has a point in that wealthy countries now want to minimise pollution and resource degradation whereas poor countries feel aggrieved that their opportunities to join the first world are restricted because it was the wealthy countries who got in first and polluted in an unrestricted manner. There are no easy solutions but they do exist, e.g. the REDD scheme for reducing deforestation.

The far left and far right are similar, both want the gravy train to continue, both do not accept it wont be coming, the only difference is who gets what % of the ever "bigger" gravy....
The fear and immorality is in the far left and right such as this.......

You know , I just have to say when a ten year old boy can get on a plane in the UK with no paperwork nor accompaning adult , find a seat,........... fly to Rome...............
Then the terrorists may just be overthinking the problem.

There was a similar incident in the latter part of the last year too, Christov, though from memory it was an even younger child. With an admission that border staff thought Bangladesh was part of the EU so let two 'watch list' suspects through unchallenged, terrorists don't really have too much to think about at all in the UK I'd say.  The incompetence due to Olympics must be an 'Olympic' dream for them.

John Wilson is the new Chair-elect for Fonterra.  Perhaps David/Bernard would do a background piece on him.  First he has to get re-elected at the AGM.  One director described him to me as a very good strategic thinker - the best on the Board, BUT another personality in Henry's mould. 

& stepped in when SC found he had had enough of it just before.

What a mess the Keynesians have made of us. Regarding Britain, to get the money in, they've gone wholesale into the Orwellian society: asking kids to dob in the adults who aren't paying their fair share of tax: my update (1) on this post. Disgusting.

Tribeless, this mess isnt Keynesian, ....its made by "lesser" libertarians such as Greenspan...
They are the failures.
I guess your outlook is so distorted reality never has a chance to get to you.

You're right, steven, I can't debate reality distorted on your scale. Haven't got a shot.

yeah right....

An interesting article on Keynes.
Disclaimer: I have no opinion on any of the economist vs economist debates other than central banks/govts./economists/mankind have failed considerably following any economic theory.

LOL, by "the Ludwig von Mises Institute of Canada,"]
mad rant by Kooks......
Oh I agree that we have a failure, but to blame Keynesian economics as the cause ignores the reality of,
1) who was the world's most powerful man in finance, Greenspan, who followed.....Ayn rand....objectivism/liberatarianism......
2) Greed was good since the 1980s.....pseuod-monetarism.
Really its been a case of voodoo economics....no real school properly followed just the bits pollies lked on a case by case basis..
Then we have the claim that keynesian polices in the last 4 years hasnt fixed it,
1) The keynesian policy of spending (Obama's plan) was inadequate by 50%+ and counter-balanced by austerity, the Austrian viewpoint aka mises.  The UK has gone austrian and is now in a double dip. tThe others who have followed austerity? look at Ireland and so has Greece...
I really wonder what more real world evidence is needed of the failure of austerity....
2) It ignores that we havent actually fallen into a Great depression....ie it could have failed even worse.

Proving that you cannot teach an old dog new tricks, we had the pleasure of Ruth Richardson pontificating in section C page 6 of today's NZ Herald, and quite off putting it was too.

It turns out that,if she had the ability to make one change to improve New Zealand it would be "to reduce the size and reach of the state." No mention of bringing competition to markets, bringing back the free market or reducing the number of monopoly or near monopoly private sector "Toll Booth"" operators. No her main aim is to roll back the state. Clearly she has no time for competition and free markets- just get rid of the state and let the monopolists rule.

Off course you have all seen the flaw in her argument. There is something she can do to improve New Zealand.....go away and never come back.

Ruth is a very clever stupid person in the style of Don Brash, Bill English. People who know a lot but don't really get it.

look at her list/ cv of corporates..
How is she going to fix synlait, or does she not see anything to fix..........

Just been reading William K Black's testimony to the senate where he is testifying about control fraud and the GFC due to the fall out from the sub-prime crisis
All the regulators needed to do to prevent the crisis was ban lending practices that were rational only for control frauds engaged in looting. The regulators consistently refused to do so because of their anti-regulatory ideology. Traditional mortgage underwriting practices are highly effective against fraud. The regulators knew what reforms would work, but refused to mandate the reforms
Plus another William K Black article found at  http://ssrn.com/abstract=1607124 http://ssrn.com/abstract=1607124
"Neo-Classical Economic Theories, Methodology and Praxis Optimize Criminogenic Environments and Produce Recurrent, Intensifying Crises"
The problem for economists was that the regulators’ success exposed the inherent failures of “modern finance” theory, methodology, and policy. Their “solution” was to ignore the regulators’ successes and their own failures. Prominent economists, such as Alan Greenspan, uniformly praised the worst control frauds. This did not, however, harm their careers or their reputations among their peers. Economists ignored accounting fraud and blamed government “intervention” (that is, deposit insurance) for causing the debacle and promoted greater deregulation (ending or severely limiting deposit insurance) as the cure to any ills of deregulation. They put their faith in “private market discipline”, which is akin to relying solely on the immune system to prevent epidemics. They missed the fact that the debacle exposed “private market discipline” as an oxymoron that aided accounting fraud.8
This revisionist history was so effective that the most notorious failure as an economic prognosticator, and the fiercest opponent of regulation during the debacle, Greenspan, was made the most powerful regulator in the world. Keating, the most notorious S&L control fraud, used Greenspan to recruit the five Senators that would become infamous as the “Keating Five”.9 As Chairman of the Federal Reserve, Greenspan reprised his earlier failures during the S&L debacle.

Is it any wonder that NZ investors steer clear of markets when the regulatory framework in NZ is so weak.  No protection = No Trust.  And Ruth wants even less....
Too much fraud has happened in NZ. With very few getting their come uppance.  I'm not surprised that many NZ investors steer clear of investment markets.

Not wrong..
When we looked at where the money went in BB and Allco, stuff you wouldn't expect happen because the individual stocks had dispensations from the otherwise written exchange rules...
Meant the cash was well gone.
Turned out punter cash subscriptions had been treated as Mgt Co fees and an tax accounting entry labelled equity with nothing real on the otherside - you get the drift. And the whole thing a bucket to load with debt (the equity fees were on total assets - the debt funded assets too). And to that that the same bodes popped up everywhere...
We are not impressed by infrastructure trusts listed or otherwise - as they seem to fundamentally deconstruct the limited liability company structure and rebuild something the punter has no chance with (other than to see the fees wiz round) ...

And if you search for William K Black's writings since the S&L scandal in the late 80's / early 90's you will see his hindsight meant he was flabbergasted by the mistakes made in the late 90's, early-mid 2000's with the capture of the regulators by the banks
The success of the S&L regulation in the mid to late 80's didn't fit with the theory of efficient markets... So the sub-prime crisis played out as it did due to the dogmatic beliefs of the neo-classical zealots, and the capture of the regulators by the banking industry lobbiests.
Black's "The best way to rob a bank is to own one" documented how the lobbyists for the crookest S&L operators were trying to buy / influence the lawmakers to deregulate.  In the main, in the late 90s and early 2000's they succeeded in freeing the banking industry of any meaningful over-sight.  Helloooo sub-prime crisis and GFC
BTW. I by no means believe all regulation is good.  For example, the pendulum has swung too far building regulation wise after the leaky building fiasco.
But it annoys me when white collar criminals are given a free pass to rip people off.  And there is nothing done as it is all too hard.

good point eg. S Jobs.
However, don't think its applies to the financial engineering brigade.
eg. BridgeCorp/EuroNational... SCF
even Infratil - where is the entrepreneurial genius.
Or is borrowing a lot of debt the mark of genius.
- we would have thought the repaying of it was now ........

and when there are accounting shenanigans like this....