Here's my summary of the key news overnight in 90 seconds at 9 am, including news Republican leader in the US House of Representatives, John Boehner, said overnight he was confident a deal could be reached to avoid the US government going over the 'fiscal cliff' on January 1.
Currently, the US government is scheduled to automatically reintroduce higher taxes and make spending cuts equivalent to 4% of GDP, which would drive the world's largest economy back into recession. Democrats, who control the Presidency and the Senate, want tax hikes on the rich and limited spending cuts, while Republicans, who control the House of Representatives, want no tax hikes on the rich and lots of welfare spending cuts. See more here from Reuters.
US stocks were up around 0.5% in late trade on hopes the fiscal cliff could be averted. However, it was also stronger as US retail chain Costco announced a capital return to avoid a tax hike on such returns from January 1. See more here at Bloomberg.
However, the debate is far from over. Erskine Bowles, one half of the Simpson Bowles fiscal commission recommending America fix its budget problems, said overnight he saw a two thirds chance no deal would be reached, Bloomberg reported.
Meanwhile, financial markets continue to meander along with very low volatility as printed cash from the US Federal Reserve, the Bank of Japan and the Bank of England washes around the banking system, easing financial stresses. The European Central Bank is expected to start printing soon and the Bank of Japan is expected to ramp up its printing.
Investors and central bankers around the world have now pumped the engine full of petrol, hoping the cylinders will fire, although some argue this has just flooded the engine.
Closer to home, the New Zealand dollar remains firm and elevated over 82 USc.
Wholesale interest rates here remain low with the 2 year swaps rate falling another couple of basis points yesterday to 2.6%, suggesting markets see few if any rate hikes in the next two years. They are also pricing in a 25 basis point rate cut in the next year.
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4 Comments
I just had lunch with a local businessman, it was fun he's a hoot. His wife is quite a high powered lawyer. To get to the point she told him to stop being a pansy and go get a gun, she thinks the USA is going to hell(she's a bankruptcy lawyer), and wants to know her husband can protect her. So he marches himself to the gun shop to get told ," we normaly sell 5 to 7 guns a day, last friday alone we sold 137, we have no guns". So he thought he would buy some ammo at least it was a start, .223 ammo-sold out, reloading gear sold out. Goes to another shop same answer.
We all should buy shares in gun makers.
http://www.infowars.com/black-friday-gun-sales-hit-new-record-high/
What is really frightening about U.S. society is that they stampede and kill each other just to buy discounted trinkets. What will happen if food, fuel and other essentials were to become scarce. Let's not forget that these people are massively armed with very dangerous weapons.
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