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.
No chart with that title exists.
41 Comments
Morning all,
Free trade perhaps not such a good idea?
http://www.theage.com.au/national/free-trade-is-costing-millions-report-20101213-18vj6.html
Cheers
Alex
Oh but Hamrod you leave out the best bit...interest rates going up because councils will borrow to rebuild the rotten stuff...so rate payers get stiffed to pay the lenders and screwed if they have a mortgage......isn't this fun....and who caused the shit in the first place....yes you guessed it...useless bloody shites in govt in the 90s.....now who were they?
And immigration is not the answer to our problems, either.
"...we have to increase ....public infrastructure for a bigger population. So the migrants are paid to supply their labour, but the rest of us have to provide the extra economic and social capital they need if standards aren't to fall."
http://www.smh.com.au/business/beware-gurus-selling-high-migration-20101219-19201.html
Must be a quiet day at the ranch if all we can find to play with is Uncle Bernies new haircut?
C'mon you guys...get blogging..take the world apart...impart some startling revelations..the financial world is watching and we're depending on you here at HQ !!!!!!
Where's Christ-stove when we need him?...getting the manger ready ,i guess....
I been getting the Mange more like it Robo....taken a few haircuts of late so the rest is falling out of it's own volition or sympathy .....still not much to mope about....I have legs.. ...I have arms....I have eyes................Oh Lordy Lordy ...ah can see!...ah can see! it's a friggin miracle is whut it is.
I'll be poppin in and out this week as i gots ta do mah shoppin n wotnot.....but I'm watchin.
Gummy's Monday Moaning Tip : If the Euro is to remain in the firey pits of despair , then the strongest economy in Europe must be a good bet . Plonk all your Kiwi pesos into stocks listed on the German stock exchange , the DAX . ............ . And if they go down , and you lose your shirt , you've still got your under-DAX .
.......... C'mon , it's Christovmas . Be happy , team !
Siemens and BASF are perennial favourites of mine . But Bayer , K & S , Hochtief , Beiersdorf , Bilfinger Berger and Suedzucker warrant a looksie too .
The real action of course is the small caps , but it's been awhiles since I was in that space . Did very well there , if memory serves .
Bernard's haircut is lovely! But have you had botox too? Surely not, or Something Would Have To Be Done about all those tv talking head appearances.
Did anyone notice this last week?
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10694963
Electricity prices look set to climb next year.
The Domestic Energy Users' Network says the wholesale price for electricity increased from 8.5 cents per kilowatt hour on December 1 to 23 cents per kilowatt hour two days ago.
That's more than 2.5 times; anyone know what it means for the little people?
From my daughter in London, six inches of snow. Meant to be at a family X-mas party but roads closed, Heathrow down, trains stations full of people. Granny stuck in snow so need to get a lift south for X-mas. Went to big Westerfield mall, full of people lots of shopping bags, credit cards out everywhere. Busy busy, no sign of recession.
You may be right Shags sheep, but competition from pigs and chicken coming fast. Im still happy to be on the sideline giving useless advice to late.
Talking about the weather have a look here (click on the web cam too) and compare the forecast with your town – surprise !
http://www.metservice.com/towns-cities/nelson
Following the service closely (in details) over many years, I personally think the weather/ temperature forecast is far from accurate and it seems particularly Nelson receives Christmas presents from the Met Service all the time.
As an example the temperature forecast for Kaikoura in the media this morning 22 degrees currently
http://www.metservice.com/towns-cities/kaikoura 28.5degrees by 3pm more then 29 degrees that’s a difference of more then 7 degrees !!!!!!!!!!!! – not just occasionally - happened all the time.
The wording for Nelson: long fine sunny spells for other towns cloudy.
..and by the way have a look on the link: http://www.bom.gov.au/products/IDX1299.shtml
A weather-bomb is approaching the Westcoast.
The missing of the normally existing strong high located in the “Eastern Tasman” will cause a number of severe weather events this season here in NZ - especially in the North Island.
too late to turn back now..weather bomb or not..toes upon the knows..heeeere weeeeeeee goooo!!
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