90 seconds at 9 am: Sequester starts

90 seconds at 9 am: US budget compromise fails; Dow at new record; EU banker bonus rules resisted; German jobless levels in surprise fall; AU$ held by 34 sovereigns; NZ$1 = US$0.828, TWI = 75.8

1st Mar 13, 8:46am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that there is still little real effort under way to avert automatic US budget cuts that take effect later today - both sides are taking positions that suggest they can live with the so-called sequester.

The IMF says it's outlook for US growth has dimmed on the situation, although a revision in US data switched the Q4 contraction in the American economy to a small expansion.

In midday trade in New York, the Dow has powered on up to record highs, but gold is down, now under US$1,580/oz. Other metals are down, but oil is unchanged on the day.

New EU rules on banker bonuses, ones that will apply in London as well, are being resisted but this may not be quite the big reform many were seeking. Bankers will be limited to a bonus of 100% of salary, but there is evidence that base salaries are moving up to compensate for the restriction.

In Germany, unemployment unexpectedly fell in February amid signs that Europe’s biggest economy is returning to growth after a contraction at the end of 2012.

In Australia, the RBA has said it’s currency is held by as many as 34 central banks, and models suggested the Aussie dollar was as much as 15% overvalued, documents released to Bloomberg apparently show. And in case you missed it yesterday, data out late Wednesday showed that the RBNZ did not intervene in currency markets in January to bring down the NZ dollar.

The kiwi dollar starts the month a touch higher at 82.8 USc, 80.9 AUc, and the TWI is at 75.8.

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11 Comments

by Muppet King | 1st Mar 13, 8:55am 1362081326

New FTT for Italy starts today - 12 basis points

by Christov | 1st Mar 13, 9:02am 1362081769

Ultimately David....although the assumption on the part of most, that sequester, is being promoted as the noun...cut in Govt spending....it in fact may jus be the verb...to hide away something or someone.

Now gimme a broom, and where's that rug..?......hold on I may need a mallet, the can looks a bit lumpy there.

by Christov | 1st Mar 13, 9:53am 1362084821

Aw gees David...what's been going on with 90@9 ..? the posters are consistently down lately.

idea.! mention gold trend prices....that oughta jazz it up a bit.

I love 90@9, it's quick, it's crunchie, it's the kick start for anybody having a morbid obsession with the economy needs.

90@9 puts the ECB in my OCD.

by scarfie | 1st Mar 13, 10:27am 1362086861

Needs some controversy to liven it up so I will give it a go :-) Some thoughts I was playing with over the summer are pasted below. A bit more landlord bashing is what we need, since they are clearly parasitic on society.

by iconoclast | 1st Mar 13, 11:15am 1362089709

It's all GBH's fault visitors and postings are down. Chaston is un-controversial. Hickey is in his cave re-engineering himself to align with GBH's exhortations for feel-good news

by scarfie | 1st Mar 13, 10:26am 1362086776

An economy exists to serve society, not the other way around.

There is no economic activity of value unless somebody makes or grows something. All other economic activity subtracts value and detracts from society.

Good economic activity builds a society, bad economic activity destroys it.

Society is built by people creating, building, producing, growing. Capital is built by these same activities.

Society is destroyed by people not engaged in capital building, activities like loaning money, merchanting, politicking, renting. Capital is destroyed by these activities. Since these activities consume capital with no return then all proceeds from these activities are unearned. The effect of people consuming and not producing is destructive to society.

It is human nature to seek security and to avoid the uncertainty of what the future brings. One way this is expressed is through saving. Food is the most basic of all needs. In terms of savings, money is really only a proxy for food. Money buys food but it is really the food that is wealth, you hope that in the future your money will buy you food.

There are those that seek to secure their future through the accumulation of wealth, but unless they make or grow something they are really stealing another man’s wealth. By not making or growing something their contribution to society is negative. By further accumulating other men’s wealth their destruction is compounded.

The irony is that the behaviour that seeks to build security by accumulating the production of others actually destroys the society that would provide the real security.

How can you spend your life getting one over your fellow man and then expect that man to have the good will to help you? How can you really develop meaningful relationships when every man is simply a resource to exploit? When you spend life trying to get one over other men, how do you avoid the worry of them getting one back over you?

by Christov | 1st Mar 13, 11:58am 1362092332

A little light on controversy there scarfo, but some nice musings,gaining a perspectrive about when we are wealthy is, and always will be point missed, lossed , deferred,because we allow others to influence how we feel about ourselves on a most often unbalanced level.

Stay well.....How those Highlanders doin...? too many stars not enough indians..?

by scarfie | 1st Mar 13, 12:23pm 1362093789

Perhaps a little light I agree, but anything that highlights the behaviour of landlords is virtually criminal usually gets a rise around here. I am lucky in some regards Count, in that I have never been one to worry excessively about what other people think of me, their thoughts are their problem :-) BTW my handle was just a joke leveled at me by a former colleague, they don't to Architecture down south. That is on hold while I play with fire.

by meh | 1st Mar 13, 3:18pm 1362104291

Nice scarfie.

I would have to question how much of current producing that is done is of any benefit to society other than providing jobs. What benefit to society when all necessities have been commodotised and there is now only a need for money. What benefit to society when those that control the capital have an undue influence over the rest of society. What benefit to society when some individuals are valued more than others.

One must question the concept of profit and financial wealth.

by Mike B | 2nd Mar 13, 1:59pm 1362185949

Well presented Scarfie and i agree

by Andy Rodgers | 1st Mar 13, 12:00pm 1362092436

scarfie - Nothing controversial in that message and I totally agree with your sentiments. I think the poster boy of this type of parasitic behaviour is Goldman Sachs. Their actions, together with the policies of Bernanke's Federal Reserve, are ensuring the future collapse of the U.S as we know it.