Here's our summary of the key overnight news in 90 seconds at 9 am including news global sharemarkets rose to five-year highs, US Treasury yields fell and US oil futures dropped below US$100 a barrel.
These moves were based on expectations the US Federal Reserve may not start tapering its massive quantitative easing, or monthly US$85 billion asset buying programme, until sometime in 2014 because the recent government shutdown has delayed economic releases, leaving the economic picture in the world’s biggest economy unclear.
The shutdown has delayed economic releases. And Chicago Fed President Charles Evans told CNBC the Fed needs a couple of good labour reports and evidence of increasing GDP growth.
He said he wants to see "consistent" non-farm payroll growth of 200,000-plus jobs and a lower unemployment rate. Evans said all this would probably take a few months.
Reuters expects US non-farm payrolls data for September, out tonight (NZ time), to show jobs growth of around 180,000 and an unemployment rate steady at 7.3%.
Meanwhile, sales of existing US homes fell in September for the first time in three months. The US National Association of Realtors said home sales fell 1.9% to an annual rate of 5.29 million units from 5.39 million in August, which was the strongest since 2009.
The next Federal Open Market Committee meeting is scheduled for next week, which should shed further light on the Fed's thinking.
There’s also fresh news on the Libor manipulation scandal. British prosecutors have identified 22 individuals from various banks as potential co-conspirators into the manipulation of global benchmark interest rates. The individuals were notified last week by Britain’s Serious Fraud Office that they were being investigated. And Reuters reported Deutsche Bank summoned about 50 employees for questioning about possible Libor manipulation.
The New Zealand dollar is at US84.65 cents, A87.64c, and the TWI at 77.97.
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16 Comments
The shutdown has delayed economic releases. And Chicago Fed President Charles Evans told CNBC the Fed needs a couple of good labour reports and evidence of increasing GDP growth.
What, to shut down the liquidity pump that ensures maladjusted investment in non-productive assets? Not in my life time - too much money for a few people to be made.
All those who claim there is no inflation, and a tsunami of hot central-bank money flooding the world, are advised to check out the housing numbers reported overnight by UK's property website Rightmove, according to which asking prices in London saw an "unsustainable" 10% month-on-month increase in October. This sent the typical asking prices in the capital to £544,232, a new record high surpassing the previous high set in July by more than £28,000.
Who is to blame, in addition to central banks injecting nearly $150 billion in fresh liquidity in the market every month? Why Europe's Cyprus template of course: according to Rightmove, the "frenzy" of activity in parts of prime inner London is due to overseas investors who are looking for a safe haven to place their cash, which is "leaving the shelves bare." It also means anyone who is not a robber baron, oligarch, money launderer, or otherwise has criminal access to billions, is fresh out of luck and priced out until the next housing crash. Read more
All the while China dominates our meat export industry:
Meat Industry Association chief executive Tim Ritchie has warned the country's meat companies against becoming too reliant on the booming Chinese export market.
China is now New Zealand's largest single market for sheepmeat by volume and value, but the industry had to try to have a balance of trade outside of China, he said.
"It's about getting that balance right."
He feared a repeat of New Zealand's dependence on meat exports to Iran in the 1980s. Read more
But just like other matters the decision making is no longer in the hands of our elected politicians, but in those of unelected, but definitely unaccountable, bureaucrats.
"But bluntly, I'm not in favour of big pay increases for MPs. If it was my vote, it would be no pay increases, but I don't get that vote." Read more
Andrewj
I don't seeing anything in that slideshow that gives a compelling reason for the yuan to become the Global reserve currency.
A lot will have to change in China and USA will have to continue on its destructive path and abuse of its' position as the worlds reserve currency..
ie. there will nee to be a Crisis...
My best guess is that at some point in the future there will be another Bretton Woods... where the world creates a new Global Monetary system.
If it came to that.... I'm sure China will have a large part to play in that..... (maybe moreso than the USA.)
Roelof, they are coming our way and we are for sale ready or not.
Of course hes not the biggest farmer, just another bloody government worker parroting national party policy,
Andrew.... I agree...
We are watching History unfold...
I personally think that the Current assett boom will be the biggest yet..... It is all Global now.
Food producing businesses are to the Chinese as "cloud" style internet businesses are to Western investors..
ie.. they both are happy to pay toooo much... but for different reasons.
Japanese, Chinese and other smart foriegn investors will outbid us everytime when it comes to good food producing businesses... ( Cedenco comes to mind )
Trading hard assets for paper money.... is a mugs game.. eg. sale of state owned enterprises....etc
Most of the smart guys I know are saying..... "Buy hard assets ...and hang on for the ride"..
"But I think corporate farming is here to stay in New Zealand, and it will improve its profile over time as the investment community understands what it can deliver in the short-term and what it can't."
Not much according to a supposedly seasoned investment professional:
While he was running Tower, Stubbs said, he was "dying" to buy New Zealand agricultural assets, but the only way to do so was to buy farms, which typically yielded only 4 per cent annual return for corporate owners.
"I can stick it in government stock and get more than that." Read more
Hardly a return structure guaranteed to attract the funds Landcorp's CEO claims are necessary.
"New Zealand's got something like a $60 billion capital deficit in the primary sector. If we're to achieve our goal of growing the industry to where the Government hopes to be by 2020, that capital is not going to come from New Zealand."
Agree. Credit where credits due...... - only... we say
let people be known for their deeds, not mortgages...
Don't have debt rise faster than Incomes
because your debt burdens will eventually crush you
Don't have income rise faster than productivity
because you'll eventually become uncompetitive
Do all that you can to raise productivity
becasue in the long run thats what matters most
http://www.youtube.com/watch?v=PHe0bXAIuk0
bookish may prefer.
http://www.bwater.com/Uploads/FileManager/research/how-the-economic-mac…
Todays marks the launch of an Auckland City version of the popular bored game , Monopoly !
... yay ! ... the Sky Tower sits on the coveted " Mayfair " spot ...
And in an ironic twist of fate , or art imtating life , there's not enough money in the bank for you to buy any of the properties !
... should've created a Gore or Mataura version of Monotony !
Must admit I like the reality version conducted daily on Wall Street - the Fed guarantees everyone is a winner without the family squabbles and inevitable tears. And what's more illegal short sellers guarantee an abundance of script available for purchase and short squeezes. Yippee.
Yet whilst the financial sector likes to think of itself as the powerhouse of the UK economy, in terms of the tax it pays, it's more of a Wendy house. HMRC figures show a drastic reduction in Corporation Tax contributions since the financial crash – on average just £3.3billion a year, even when the paltry Bank Levy is included. To put this in context, the finance sector shelled out £14 billion in bonuses to top staff last year alone.
I guess our wine industry doesn't pay much tax either:
The value of New Zealand wine exports rose to a record in the 2012-13 year even as volumes declined, the nation’s growers’ association said.
Export earnings increased 3 percent to NZ$1.2 billion ($1 billion) in the year ended June 30, while export volumes fell 5 percent to 169.6 million liters, New Zealand Winegrowers said in it annual report published today. “The small 2012 grape crop meant wine was in short supply and wineries took the opportunity to improve their positioning in the market,” Chairman Steve Green said in the report. Read More
Does this not amount to an export price of ~NZD 5.31 per 750 ml bottle? After all up costs are deducted how profitable can this endeavour be, other than to the supermarkets knocking it out at plus 2-3 times this cost to the locals? Glad to be corrected by those who know better.
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