Bernard Hickey is away today and tomorrow at his daughter's school camp, so the team here at interest.co.nz have put together this alternative Top 10. It's not Bernard's, but we hope you find it worthwhile anyway.
1. How close is America to fiscal crisis?
The US Congressional Budget Office projects that America's 2011 deficit will be US$1.5 trillion, or 9.8% of GDP, and debt held by the public in the 2011 fiscal year will approach 70% of GDP. How close is America to facing a bond market crisis? Should drastic cuts to the budget be made now? Over what horizon should they extend? And what balance between tax increases and spending cuts should be struck? The Economist has nine smart people debating the point, with views ranging from "America is bankrupt" to "There is no fundamental deficit crisis". How this plays out will define the next 50 years.
2. Dilbert
3. Faster growth forecast as US economy gathers steam
Top US Fed officials now expect the output of goods and services in the US to grow by 3.4% to 3.9% this year, up from the previous forecast, released in November, of 3% to 3.6%. But their grim outlook for the job market was largely unchanged: 8.8% to 9% unemployment this year, only one-tenth of a percentage point lower than in the November forecast. Manufacturing shines. But some are not convinced.
4. Auckland's rent crisis
Auckland's rental crisis is worsening, with prices rising 7% in a year and desperate tenants going to extreme measures including offering to pay six months' rent in advance. New figures show rents in the most desirable suburbs have jumped an extraordinary 24%. Last week, the Herald reported how 200 would-be tenants looked through one Kingsland rental property in just 30 minutes. People really like living in desirable, inner-city neighborhoods, but does that really mean we should build more there? "Affordability" is being hijacked to mean people feel they have a right be able to afford to live anywhere they like.
5. The data
| first thing | --- 52 week -- | |||||||
| Today | yesterday | high | low | |||||
| -------- | -------- | --------- | --------- | |||||
| FX rates | NZ$1=US$ | 0.7523 | 0.7520 | 0.7964 | 0.6584 | |||
| NZ$1=AU$ | 0.7544 | 0.7534 | 0.8212 | 0.7408 | ||||
| Gold | in US$/oz | 1,375 | 1,373 | 1,421 | 1,082 | |||
| in NZ$ | 1,828 | 1,826 | 1,877 | 1,546 | ||||
| Copper | in US$/t | 10,107 | 10,147 | 10,147 | 6,091 | |||
| in NZ$ | 13,435 | 13,493 | 13,493 | 8,951 | ||||
| Crude oil | in US$/bl | 84.95 | 84.26 | 91.91 | 69.89 | |||
| in NZ$ | 112.92 | 112.05 | 121.36 | 101.30 | ||||
| US Treasuries | 30 yr bond | 4.66% | 4.67% | 4.78% | 3.61% | |||
| Dow | DJIA 30 | 12,289 | 12,220 | 12,297 | 9,688 | |||
6. Bush and Obama tried and failed, but Republicans may succeed
The U.S. House voted to kill a $3 billion backup engine program for the F-35 Joint Strike Fighter as part of Republicans’ proposal to cut $61 billion in federal spending this year. The 233-198 vote is a sign that House Republicans are ready to cut military spending. They are taking on GE who is lobbying hard for its retention.
7. Winners and losers
New Zealand is a net gainer when food prices rise. But there are plenty of net losers too, and since June 2010 the World Bank estimates that another 44 million people have slipped into severe poverty as a result of these price rises. And, they warn, local emergency 'solutions' to protect the vulnerable can actually make things worse. We have had decades of huge gains where the absolute numbers of people in poverty has shrunk dramatically as populations rose. But there are now challenges to keep the progress.
8. Up and down
On the term deposit front, PGGWrightson Finance have raised their rates for guaranteed deposits for terms of 3, 6 and 12 months. These increases range from +0.15% to +0.50%. They did not change rates for non-guaranteed TDs.
9. A big bond haircut coming
Holders of bonds from indebted European nations such as Greece will need to take losses of about 50 percent as their finances are restructured, says one analyst. And the real test for whether the euro will survive is whether Italy can get its act together. If not, the euro is toast.
10. Can you hear me?
There is an avalanche of demand for mobile data services fueled by the growth in smartphones, and the networks that provide these services are facing a daunting challenge. Maybe there is still life left for a wired world.
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