Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news Ireland's credit rating was slashed by 5 notches by Moody's on Friday night, shocking financial markets and European policymakers alike.
Meanwhile European authorities remain divided on how to stop contagion spreading within the European financial system as they battle to keep the eurozone together.
Germany remains opposed to an increase in the size of the European bailout fund and won't allow European governments to raise money through a combined Euro bond facility.
The European Central Bank was forced late on Friday to borrow 10 billion pounds from the Bank of England to transfer funds to the Irish banking system, which remains under extreme pressure. The ECB also announced it planned to more than double its capital.
The European financial crisis is far from over and threatens to turn into more turmoil that stresses global financial markets in a way that increases interest rates for New Zealand's banks as they roll over their foreign borrowings.
The New Zealand dollar remained weak under 74 USc as the US dollar benefited from safe haven buying and higher long term interest rates.
Meanwhile, South Korea has announced the imposition of a levy on foreign borrowings by local banks in an effort to control surges of capital into its economy that threaten its export sector. See more here. Should we do something similar in New Zealand?
In the United States the price of petrol (gas) hit an average US$2.99 a gallon over the weekend. That works out at NZ$1.08/ltr at current exchange rates. The difference in New Zealand is much higher taxes. See our interactive chart here of petrol prices and taxes.
Also over the weekend closer to home, the Supreme Court ruled the North Shore Council (now part of the Auckland Super City) was liable for inspections that failed to pick up homes were poorly built. This gives leaky home owners a choice of sticking with the current government deal (50% paid by homeowner, 25% by government and 25% by councils) or choosing to sue councils.
The ruling also raises the risk that councils will have to borrow billions, possibly through a joint bond issuing facility backed by the central government, to fund the payouts. That would attract the attention of the ratings agencies. Standard and Poor's is reviewing New Zealand's credit rating for a possible downgrade. PwC has estimated the leaky building rebuilds could cost more than NZ$11 billion.
Finally, the New Zealand Herald has a picture of a grumpy Mark Hotchin outside his new home on the Gold Coast. Well worth it, if only for the snarling picture of Hotchin in a Rip Curl T shirt.
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