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90 seconds at 9 am: US job gains modest; oil below US$97/bbl; China house prices zoom up; AU to raise debt ceiling; SFO looking at Zespri; NZ$1 = US$0.852 TWI = 78.2

90 seconds at 9 am: US job gains modest; oil below US$97/bbl; China house prices zoom up; AU to raise debt ceiling; SFO looking at Zespri; NZ$1 = US$0.852 TWI = 78.2
23rd Oct 13, 7:35am by David Chaston

Here's my summary of the key overnight news in 90 seconds at 9 am, including news of disappointing US job hiring figures.

US employers added far fewer workers than expected in September - a gain of only 148,000 whereas markets were expecting 182,000 - suggesting a loss of momentum in the economy that will likely add to the Federal Reserve's caution in deciding when to trim its monthly bond purchases. The US unemployment rate is now 7.2% and still well above the Fed's target of 6.5% for an end to tapering.

Equities are higher in New York in mid-day trade, however oil is tumbling, now down below US$97/barrel. Gold however is up US$25/oz and now stands above US$1,340/oz. Yields on benchmark US Treasury 10 yrs are falling again, and are now down to 2.52%, its lowest in 3 months.

In China, prices of both new and existing homes continued to rise in most cities in September, according to official data released on Tuesday. These rises were the most since January 2011 and have observers thinking an official credit crackdown in the sector is coming soon.

Australia's new government said it would seek to raise the legal ceiling on government borrowing to fund its policies and day-to-day operations, highlighting the dire state of their finances as the long mining boom cools.

Australia along with Denmark and the US are among the few countries that restrain their legislators with a legal limit on how much they can borrow. The Aussie debt limit is currently A$300 bln and the proposal is to raise it to A$500 bln.

Keep on eye on those NSW fires, things are apparently getting worse with no let-up in sight.

And something else to watch; international media is reporting that the NZ SFO is investigating kiwifruit exporter Zespri. The SFO confirmed yesterday that an investigation is underway - but wouldn't say whether it related to allegations of fraud, bribery or corruption. Zespri said it hasn't been contacted by the SFO yet, but if it was it would co-operate fully.

The NZ dollar starts the week at 85.2 USc, 87.7 AUc, and the TWI is at 78.2.

The easiest place to stay up with today's event risk is by following our Economic Calendar here ยป

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33 Comments

by  dh  |  23rd Oct 13, 8:50am 1382471430

Dairy farmers- worried about Greenhouse gas emissions? Why go for long term biological brending change when you can opt for a more short term mechanical solution.

http://www.cbc.ca/news/technology/cow-burps-tapped-for-fuel-1.2128643

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by  Stephen Hulme  |  23rd Oct 13, 9:12am 1382472726

Australia along with Denmark and the US are among the few countries that restrain their legislators with a legal limit on how much they can borrow. The Aussie debt limit is currently A$300 bln and the proposal is to raise it to A$500 bln.

 

A far cry from Peter Costello's budget surplus years and associated claims of eliminating any vestige of outstanding Commowealth Government Securities debt.

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by  Alter Ego  |  23rd Oct 13, 9:18am 1382473099
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by  Gummy Bear Hero  |  23rd Oct 13, 9:22am 1382473327

Call me naive if you will , but if your country operates a fiat currency , what is the point of having a debt ceiling ? ...

 

..alike a summer blow-fly , you're gonna spent alot of time banging up against the ceiling , and then repeating the exercise time and again ....

 

Any country will soon enough know that it's overstepped the bounds of fiscal prudence , the world's currency traders will do a " Thai Baht " act on any jurisdiction who goes one step too far  ....

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by  Stephen Hulme  |  23rd Oct 13, 9:27am 1382473651

Yes indeed, even the mighty USD got a spanking last night versus our own puny record of account. View graphic

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by  Andrewj  |  23rd Oct 13, 9:36am 1382474186
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by  Stephen Hulme  |  23rd Oct 13, 9:55am 1382475342

The spin never ends - when will they listen to ostrich's data backed claims that ~40,000 individuals have fallen off the Auckland eligible to work register in recent quarters, thus enhancing the employment levels?

 

Does it not cross these spinmeister's minds that the participation rate has to be taken into consideration when making bold but, erroneous employment claims - they need to check the Stats more rigourously or they will remain employees at best for a short time within the confines of failing newspaper entities.

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by  Andrewj  |  23rd Oct 13, 10:34am 1382477660
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by  Stephen Hulme  |  23rd Oct 13, 10:53am 1382478795

Slave labour - there should be laws against it - the economy will inevitably fail without a significant percentage of consumers in charge of discretionary spending capacity - one good point is the credit industry will deflate and a reordering of reality is guaranteed.

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by  steven  |  23rd Oct 13, 12:18pm 1382483925

Yep, but that is where its going. This leaves but one option I can see, a huge progressive tax change to "claw" tax back off the top few % to payout as WINZ. That doesnt strike me as too hot a solution.

The credit deflate will cause a huge recession/depression surely? (aka the 1930s).  If you follow Minsky / Steven Keen that seems assured.  I dont know of any other economic model offering an alternative when the credit gets withdrawn.

"Slave Labour" well thats interesting because teh US uses its proson labour as slave labour....I also wonder what happens to all the debt....its either jubileed on or we have victorian debtors prisons again, slave labour in all but name.

Of course when you go back to my point in that money is a proxy for energy and there wont be the energy where will the "money" be to keep the circus going?

Interesting times we live in.

regards

 

 

 

 

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by  H.  |  23rd Oct 13, 11:11am 1382479878

Also:

"Big infrastructure jobs dominate the city's economic scene. Cooper said that the Waterview Connection and the City Rail Link were the biggest."

So indirectly those are essentially government/tax or worse debt funded jobs. Always does my head in when that is counted as growth. My understanding is that the (local) government borrows money to invest in infrastructure in order to make the city/infrastructure more efficient so that after the spending and borrowing binge the city can out-compete other cities for mainly CBD office jobs as a result. 

 

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by  steven  |  23rd Oct 13, 11:52am 1382482369

So you are of an "Austrian" economic outlook then?

Lets look at some things,

a) If we have a worker on the dole, the Govn pays the worker for nothing. If that worker is working on a valid infrastruature job providing a long term economic benefit to NZ then we only count the difference in the 2 incomes for that worker.

b) When private industry isnt investing and expanding and indeed contracting then if the Govn doesnt step in and spend then the lack of prvate investment it makes the recession worse, a self inforcing negative.

c) I fail to see the difference between a private company borrowing to invest productively  (see d)) and the Govn....all else being equal.  So "worse debt funded" is really a strange comment.

d) I would tend to agree with you on the last point but really I'd not use the word "efficient" but "attractive"....and that I do think is probably a crock of doggy doo doo on council's part....some of their spending is at leat questionable or even no real economic benefit.

regards

 

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by  Andrewj  |  23rd Oct 13, 11:58am 1382482699

Where is the government investing productively?  Not around us.

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by  steven  |  23rd Oct 13, 12:24pm 1382484294

Well thats an interesting point....bridges to no where doesnt cut the mustard. Or NZ's version, "Roads of significance" when us masses have at most 10 years driving cars makes no sense either. Neither does council spending on stadiums.

PDK says it well, triage time, both in keeping what we have going and installing new where its really needed because there is a return.

regards

PS there are some very hard Qs coming and the longer they get put off the harder its going to be and the lesser the return, but this is what we are choosing.

 

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by  waymad  |  23rd Oct 13, 1:45pm 1382489130

10 years' driving left, eh?

 

I'm gonna buy me a Nissan Leaf or the then current (sorry!) equivalent once Rio Tinto falls over and releases 20% of NZ's electrons from their Tiwai potline slavery.

 

Which I figger will keep me driving around in ever decreasing circles until I too rejoin Mother Earth.

 

What's the flaw in This plan?

 

 

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by  steven  |  23rd Oct 13, 8:05pm 1382511915

"long emergency" say, civil defence laws....if there is a petrol shortage, who will be driving your car free of charge (oops) do you think?

10 years will see us well past peak oil, ppl like me well I dont expect to be driving a car...the "better off", who knows.

regards

 

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by  H.  |  23rd Oct 13, 12:38pm 1382485111

No I would not like to label myself 'Austrian' or anything really. Not impressed with economists of any ilk in general but let's not dive into that snake pit. 

Money is better spent on getting people to do some work for their money rather than paying them on the dole. That is certainly true. But the whole business of unquestionably adding any outgoings to GDP and thus claiming it as a good thing is too simplistic.

Adding CBD office jobs that have to be scavenged from other cities does not constitute much of an overall efficiency gain. Businesses will in the meantime be aiming to reduce the number of office jobs continuously by necessity so that is not a linear process either. And when the building stops which at some point it will have to, the whole multiplier effect - pyramid comes unstuck. Positive feedback loops are hard to control. 

"Worse debt funded" implicitly assumes that the investment decision by the council is based on a crock of doodoo indeed. We seem to agree on that. In that case borrowing increases the tax burden in the long run because the implied return on investment probably never substantiates. Borrowing then compounds the problem. Hence 'worse'.

 

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by  steven  |  23rd Oct 13, 12:40pm 1382485248

What really worries me is as a rate payer, yes "increases the tax burden in the long run because the implied return on investment probably never substantiates. Borrowing then compounds the problem. Hence 'worse'."  The rate payer is liable in the end, even if the councilors acted illegally or amorally, presonally I think there should be jail time.    Im watching the case up north with interest. 

regards

 

 

 

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by  Gummy Bear Hero  |  23rd Oct 13, 11:08am 1382479734

New Zealand's space programme is going gangbusters , with Pacific Edge rocketing up 32 % this morning , hold onto your bladders fellas , following on from a stellar 50 % rise yesterday ...

 

... infact , the stock hit $ 1.75 this morning , but cruised down to $ 1.40 currently ...

 

Fellow " Lord of the Stars " stock XERO , has managed a 40 cent gain , but only 1.4 % on it's already highly elevated price ...

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by  iconoclast  |  23rd Oct 13, 11:15am 1382480121

Keep on eye on the NSW fires. Getting worse with no let-up in sight.



Keep an eye on the skies over new zealand. You should be getting a blanket of smoke and C02 and ash some time soon. Just breathe a little faster.

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by  Gummy Bear Hero  |  23rd Oct 13, 11:32am 1382481179

... having lived through the bush fires over on Eyre Peninsula last summer , I'll happily take NZ's earthquakes anyday ...

 

Bush-fires are seriously scary !

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by  iconoclast  |  23rd Oct 13, 11:39am 1382481598

agree .. lived thru the black saturday fires 3 years ago .. dont want to do that again .. we're getting out .. plans well under way

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by  Andrewj  |  23rd Oct 13, 11:52am 1382482342

Had a fire up here this year. It was burning at 1200 acres an hour, 80 homes lost, I think. They brought in 20 huge bulldozers, flew in DC10's and had 30 smaller bombers, out of control for a day. Scarry as hell and as hot as too. 

 Now we have the police and Highway patrol Helicopters looking for some drug dealers and they are all over our block, sirens were going so they must have caught a few. I locked the doors but should nip down and get a shotgun.

  Its that time of year in California, harvest time.  Its a big deal, even though its defacto legal.

 

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by  Gummy Bear Hero  |  23rd Oct 13, 1:47pm 1382489270

NZ Post to slash mail deliveries to thrice weekly , from 6 delivery days currently ...

 

... and to turn many NZPO outlets into self-service kiosks ...

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by  Gummy Bear Hero  |  23rd Oct 13, 6:12pm 1382505129

JK & Wild Bill ... you should've done a " Royal Mail " ... and off loaded this barker ( NZPO ) onto the gullible cashed up plebs , B4 the bad news came out !

 

.... SOE stands for " sell off everything " , in case youse forgot ..

 

.. http://www.youtube.com/watch?v=9sLR0vgpeWI

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by  Andrewj  |  23rd Oct 13, 6:15pm 1382505354

But they stand behind Kiwibank!

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by  Gummy Bear Hero  |  23rd Oct 13, 6:26pm 1382506007

.. gotta keep Winston onside , Justin Case you need him in 2014 to make up the numbers .. he's all for nationalising everything we " need " .. Screw the Aussie bwankers ( where are you , Sore Loser ? ) ...

 

When you're 40 and still a virgin  , heck , even Oprah looks like a Goddess ! 

 

.. desperate times , my friend ... Even I am pulling in my belt and sculling cheap French Syrah , can't afford the good $12 Aussie Shiraz ...

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by  wtf  |  23rd Oct 13, 6:33pm 1382506403

Yellowtail Shiraz $9.99 at New World most of the time. Sometimes $8.99. Can't be beat

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by  Gummy Bear Hero  |  23rd Oct 13, 6:50pm 1382507442

Yellowtail , which didn't exist 20 years ago , now make up 20 % of all wine exports from Australia ..

 

.. 1 bottle in every 5 sent off-shore ...

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by  Christov  |  23rd Oct 13, 6:44pm 1382507088

SoreL, Mist, Vanderlei......a glass of my finest to you this evening....AWOL ...gone but not forgotten.......some great days were had....sigh (t.m. Bernard H )

Shiraz you say GBH...mmmm, I had you for a fat cabernet man....or the rarer oily pinot noir....the sundown first rum n coke...unbeatable.

Still...a glass to you also Mon Ami......ever wondered how many shares Dilligent might have in XERO..? ever wondered that.....?

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by  Gummy Bear Hero  |  23rd Oct 13, 6:52pm 1382507545

.. gargling a rather cheeky Californica Zinfandel as we speak ...

 

Delicious ! ... diligent enough not to be a Xero and spill some ..

 

.. miss those guys , Count , and my nemisis , Walter ..

 

Where's Wolly ?

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by  wtf  |  23rd Oct 13, 6:29pm 1382506188

Kiwi Bank operates exactly the same as all the others. They stand behind all the banks and they know it. OBR would be gone by lunchtime if the proverbial really hit the fan

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by  KH  |  23rd Oct 13, 10:14pm 1382519667

In the Hunter.  M1 motorway blocked this afternon. Turned smokey 2 hours ago.  Taking reglular circuits around the house to look. Not happy. On the good side the gale has ceased. And cooler tomorrow after 36 today.

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