Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news from Jackson Hole.
Markets have now accepted that the US Fed will start its reduction in bond buying - tapering - in September. But they are nervous anyway.
The IMF worries that the impact it has seen on emerging markets may grow.
And corporates are holding back on new debt issues - in fact investment grade corporate debt issued worldwide in August is at only half the level of the same month a year ago, and at its lowest monthly level in five years.
Meanwhile, Greece will need a third bailout worth about about €10 bln but would not accept new austerity measures, the Greek finance minister said over the weekend.
Germany's budget surplus rose to 0.6% of gross domestic product in the first half of the year, boosted by higher tax income.
Argentina has lost in a US Appeals court again and told it must pay back more than US$1.3 bln to a group of investors who didn't agree to the haircut it tried to impose - 11 years after its record debt default.
Later this morning we get the data on the July trade balance and markets are expecting a break-even result, imports and exports each at $3.9 bln.
The NZ dollar starts the week at 78.0 USc, 86.6 AUc, and the TWI is just under 73.7 which is back to its lowest level since the end of June.
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3 Comments
The La Garde speech at Jackson Hole a must read for most of us I think.
Repeated reference to exit strategies from loose money policy, carefull not to highlight the pain needed to correct internal and extenal policy....yes pain , a great big world of hurt for eventually who...? every man, a precursor to socialise losses incured during the extend and pretend process.
So Ben, what's your exit strategy...?
Er, what's an exit strategy...?
Well how are you going to turn off the free money..?
Oh that, yeah we are going to taper...!
taper..?
Yeah you know, slowly turn off the bond buying n stuff like that...um
So to make the markets get real ,or operate in realtime economy terms..?
Ahh, yeah right ,I guess that's about right, hadn't really thought about it ...but yeah
Won't that cause a lot of potential insovency to arise from deferred losses among the markets....?
Ummmm, well er most will probably have a strategy of their own to shift the burden..ah,
Shift the burden ..? shift it where..?
ummm, well we will be reviewing internal policies to help them through that process..
You mean socialising losses...!
Well I didn't say that....but we are all in this together....so uh you know...mmmm,gotta run !
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