Here's my summary of the key news overnight in 90 seconds at 9 am, including news European Central Bank President Mario Draghi said overnight he was ready to fire his 'Big Bazooka' of unlimited bond buying in Southern Europe as soon as Spain formally asked for a bailout.
This reassured stock markets, who are hanging out for the central bank to calm down the European debt crisis and try to restart growth. See more here on Draghi's comments at Bloomberg.
However, Spain is prevaricating on whether and when to ask for a bailout. Its Economy Minister said overnight a bailout was not needed. Spanish bond yields edged up on the doubts. However, most expect Spain will eventually capitulate, including the President of Spain's restive Catalonia region, which is agitating for independence.\
Here's a useful Ambrose Evans Pritchard summary of why Spain is so reluctant to ask for a bailout. It fears harsh rescue terms from the likes of Germany, Holland and Finland.
Spanish bond yields rose overnight. The 10 year yield rose 9 basis points to 5.90%, which is dangerously close to the 6% mark seen as unsustainable. See more here at Bloomberg.
Also there are doubts within the European Union that Spain's targets are credible. See more here at Bloomberg.
The Dow is closing around 0.6% higher as investors hope for the 'Big Bazooka' to be fired and on news that a rise in US jobless claims was slightly less than expected. See more here at Bloomberg.
Meanwhile, the International Monetary Fund's Chief Economist Olivier Blanchard has said he expects the global economy will not return to regular growth until 2018, suggesting a 'lost decade' after the beginning of the Global Financial Crisis. See more here at The Guardian.
All this concern about a slowing global economy and a return to recession in Europe matters for New Zealand because it reinforces expectations of lower interest rates for longer. Financial markets are now expecting the Reserve Bank of New Zealand will cut the Official Cash Rate by 0.25% over the next year. Markets also expect interest rates to stay at or near these record lows for another two years. See more here in our Swaps rates charts.
Tonight markets will be watching US non-farm payrolls jobs data for September, which is expected to show 115,000 jobs were created in September. The number is crucial for the outlook for the world's largest economy and important for President Barack Obama's re-election chances, particularly in the wake of yesterday's debate with Republican candidate Mitt Romney, which media pundits said he lost.
Also watch later today for news from the Bank of Japan, which is under heavy political pressure to print more money to try to weaken the yen and help Japanese exporters.
The New Zealand dollar was broadly unchanged overnight after the ECB and the Bank of England left their rates on hold. See more here on currencies moves on our site from BNZ's Mike Jones
No chart with that title exists.
18 Comments
http://www.golemxiv.co.uk/2012/10/fixing-the-libor-rates-%E2%80%93-by-f…
Five years ago I resigned from my position at the risk manager of UniCredit Bank Ireland – the Irish subsidiary of Italy’s biggest bank. I had officially notified the regulator’s office that we were ‘cooking the books’ by BILLIONS of Euros. Brian Hillery, the chairman of UniCredit Ireland at the time, now sits on the board of directors of the Central Bank of Ireland.
http://www.villagemagazine.ie/wp-content/uploads/2012/09/whblwr-cartoon…
"regular growth".
Gotta love it.
2018 is well past peak, no question. Which begs the other question: How long will the populace at large put up with fiscal traders, banks, paper shufflers, middle-people, CEO's, and the rest, creaming-off 'profit' from a capped-then=declining system?
And I dont think situation has gotten any better either
At the end of 2010, the latest figures available, our gross external liabilities were $312 billion. Four-fifths of that was debt rather than equity and three-quarters of the debt had been incurred by banks.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1072...Here is an image of the World's fattest man
http://www.chinadaily.com.cn/world/2008-02/16/content_6460377.htm
The world's tallest man
http://www.time.com/time/photogallery/0,29307,1859325,00.html
the worlds biggest tumor
http://anecdoteworld.blogspot.co.nz/2011/05/shock-worlds-largest-leg-tumor.html
I agree with PDK, we have to stop romanticizing unending growth!!! It is death bringing, not life giving.
Hate to rain on your parade , but the fat guy went on a diet , and lost 800 lbs , nearly as much as Bernard trimmed off , and is now a svelte 440 lbs in weight .
And that tall guy lost his title in 2009 , to Sultan Kosen, 4 inches taller at 8 foot three inches ..
Don't feel bad , today is an auspicious day in history ..... meebee you were shaken ( but not stirred ) that this is the 50'th anniversary of Bond , James Bond .... 007 to his friends ...
..... and also , the 50'th anniversary of some mop-top lads from Liverpool , who released " Love Me Do " this day in 1962 ....... wonder how they went with that guitar & singing thing of theirs' ? .... Hickey would've had them thrown to the wolves at the FBI for daring to upset our established music of Country & Western , and Bulgarian Folk Polkas ...
.... I can refute that with a little story about a man who went to his doctor , complaining that he had Tom Jone's tunes running through the Green Green Grass of his mind , all day .... he wanted to know if this was a common malady .... the doctor replied " it's not unusual ! "
Hope that clarifies things for you , Mr scarfie ...... any time you need to pick the Gummster's brain , help yourself ...
I am in the process of reading Michael Hudsons's latest book, "The Bubble and Beyond" he claims long term European "organic" growth has been .2% (very long term) and that the real underlying problem through economic history has been usury, ie: compounding interest payments on debt consistently outstripping economic growth.
Very interesting book, a real eye opener.
Cheers
The DOW rose overnight because of Spain ? ...... seriously Bernard , who tells you this nonsense .......... most Americans have no clue about Spain , they'd say that " Spain " is something you get in your legs if you run too fast into a Walmart sale ..... or if you waddle too fast to collect your order of a super-fat Big Mac with extra fries , you getcha spain .... ouch ....
.... I could understand if you thought market sentiment ( if there is such a thing ) was buoyed by Mutt Romney's beating of Barry Obama in the clash of the Presidential Master 'Baters ...
Facebook are making a big deal today of the fact that they now have one billion faces registered on their site ( which I thought they'd announced 2 weeks ago )......
...... one can only marvel that a business that faced up to customers just 8 years ago now has one person in every 7 on the planet using their site ......
That is the power of the capitalist system , that is innovation in action ...... satisfying a need in the marketplace ....
..... if only they could figger a way to monetize it , and to make a profit for their shareholders !
http://globaleconomicanalysis.blogspot.co.nz/2012/10/greek-citizens-storm-defense-ministry.html
Military might soon to be used to smash freedom to protest in Greece so that Greek democracy can be saves...doh!
Parasites in NZ face a serious threat to their fat profits...the hosts will learn thru social media....
"“The most common question a prospective borrower would ask back then was ‘how much will the lender allow me to have’. Now it is all about ‘how much is this going to cost’. It therefore makes sense that borrowers are downsizing for this reason"
http://www.scotsman.com/business/personal-finance/scots-homeowners-looking-to-downsize-claims-report-1-2564720
Bernard needs to lend his support to this trend, to encourage its NZ awakening....this trend will arrive, if indeed it has not already done so...it is the one positive to be found in the debt hole.
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