Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news Greek politicans voted in favour of an austerity package needed to avoid default.
However, another vote on the implementation of the package is scheduled for tonight and European banks need to agree on a debt rollover later this week. There remain doubts on whether such a rollover would trigger a formal default by ratings agencies. See more here at Bloomberg.
Greece's debt remains unsustainable and many believe it will ultimately have to default and possibly leave the euro zone in national bankruptcy.
Stock markets, oil prices and currencies rose on relief that an immediate default is unlikely. German stocks rose almost 2% while US stocks were up aroun 0.8% in late trade. Some had feared a Lehman Style freeze on credit markets if Greece had defaulted. See more here at Bloomberg. See more here Reuters on the resulting riots.
Riskier currencies, including the New Zealand dollar, also rose.
The New Zealand dollar rose to 82.2 USc and 71 on a Trade Weighted Basis, which is near a 4 year high. It also rose to a record high vs the British pound of over 51p.
Meanwhile, Standard and Poor's warned the United States its AAA sovereign credit rating would be immediately downgraded to D if the government defaults on August 2 in the event its debt ceiling is not raised. See more here at Reuters.
Talks between Republican and Democrat leaders broke down this week, raising fears of a default.
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15 Comments
The New Zealand dollar rose to 82.2 USc (actually 82.5 at present) and 71 on a Trade Weighted Basis, which is near a 4 year high.
Hang on, aren't we supposed to be testing 78.50 this week???
So - you're saying that it WILL default on it's debt, just 'not yet'.
I agree.
I suggest they will go to war first (win and you wipe the debt, lose and you're no worse off) but over energy. Oh, that's right, they already are......
Who holds the barrel wins (see: Ardennes, battle of).
One more month of US debt ceiling warnings until it gets raised then bernard?
I listened to Westpac economist Dominick Stephens yesterday. He seemed very realistic and slightly positive and overall it was good to hear him speak.
He said that despite record high commodity prices we had almost no growth through 2010, so it was good to hear that realism, but then he went on to say the limited growth was caused by a drought and less production than normal - and speaking with a few people afterwards everyone thought he glossed over that fairly conveniently. Perhaps avoiding discussing larger structural problems with our economy.
They're very confident of the Christchurch rebuild getting the NZ economy growing again. And he was quite specific in saying that would be the only thing getting us growing again. One might use the term 'wholely reliant'. Also mentioned that the activity would be very centralised around Christchurch and businesses that will benefit directly from the rebuild. Other areas of the country would probably not get the benefit. He also said the rebuild would cause inflation and bring on interest rate increases through 2012 to 2014.
His predictions for property prices were a slight increase in the short term but flat for the medium term. Very good to hear some realisim from a bank economist here.
Rest assured Hamrod, anyone predicting growth of any sort and property prices not declining/crashing will not meet with the approval of many gloomsters and they will not accept your contention that an economist is making realistic comment. They are so snowed under with all the negative stuff they gravitate to that they find anything to the contrary as incomprehensible. Good try, but it won't wash!
Allan Hubbard's first court appearance adjourned - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=107…
Standard & Poors simply love the sound of their own bull-shit ! ....... utterly discredited now , after the GFC , they're mere economic journalists ..... don't know why anyone pays for their " services " anymore .
" D - minus " ............ S & P are a joke !
... The USA is set to resume it's growth path ... their dynamic economy will raise them up , yet again , ... confounding the doom-sayers ...... as ever !
Britain as an economy has an excellent future , yes , as does Germany & France .
....... But the USA will always be more dynamic and innovative than Europe .
Lunch is chorizo sausages , dried bangus , and garlic rice . ..... Freshly picked coconuts' water for slurps , very sweet ..... care to indulge yourself ?
"Defence Minister Wayne Mapp last week said the "civilianisation" process would allow the force to get "more work out of fewer people". ODT
OK Wayne...now show us how your useless govt intends to get 'more work out of fewer Minsters'...and thereby save the taxpayers heaps...come on Wayne....you can be first.....yeah fat chance.
"Christchurch's Central City Plan is expected to cost an estimated $12 million"......and that's just for the plan...go figure!
"A new house design bound for Christchurch promises its occupants can live off the grid and off the water mains.
A warm home that provides its own water and power and costs only about $10 a week to run? It sounds like a dream, particularly in disaster- struck Christchurch.
The house has a filtered rain harvesting system, and is powered by a combination of solar panels, LPG gas, a back-up diesel generator which kicks in automatically when needed, and a deep cycle battery bank"
http://www.stuff.co.nz/the-press/business/your-property/5201546/A-house-for-our-times/
And when the drought times arrive?
And the solar panels cost how much..plus the regulators...and the wiring...? and they last how long?
And the LPG tank costs how much?
And the diesel geny cost how much? Repairs cost what?
And the deep cycle batteries cost how much and last how long?
Yes you can live for just $10 a week....!.In your dreams
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