Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news of turmoil on financial markets over the weekend.
The European Central Bank announced plans for massive intervention to buy Spanish and Italian government bonds in an attempt to stop the contagion of sovereign debt fear spreading from the PIGS (Portugal, Ireland, Greece and Spain) to the core of Europe.
This follows the downgrade of America's credit rating from AAA to AA+ by Standard and Poor's. See our article from Saturday.
China warned America it needed to cure its addiction to debt. See more here at Sydney Morning Herald.
Israeli markets were open over the weekend and fell 7% after the news. Dubai markets fell almost 4%.
The US dollar weakened against many currencies, including the the New Zealand dollar, which rose back to over 84 USc from as low as 82 USc on Friday.
(Updated. The NZ dollar dropped around 10am by as much as 70 bps to 83.7 USc as Asian markets slumped. Wholesale interest rates dropped back to their levels seen three weeks ago before talk of a OCR hike on September 15 caused ASB, Westpac and Kiwibank to lift fixed mortgage rates)
The Dow closed up on Friday after slightly better than expected jobs figures, but it closed before the S&P downgrade.
Meanwhile, political and social pressures are growing in Europe.
There was street violence in Madrid and widespread looting and riots in London over the weekend. See more here at the Telegraph.
(Updated with links and morning market action)
No chart with that title exists.
114 Comments
It is a rather unorthodox way of solving debt problems by taking on yet more debt. It is even more unorthodox if the servicing of the existing debts is impossible without taking such additional debt. This is a classic example of a downward debt spiral: sliding into bankruptcy. Yet this is exactly what the US, as well as Britain and many countries in the Eurozone are doing.
http://gregpytel.blogspot.com/2011/08/irrational-exuberance-two-double…
We face recession without shock absorbers as Berlin loses patience with the eurozone The Great Reprieve is exhausted. The world has used up the three years' grace gained by extreme stimulus after the debt bubble burst in 2008. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/86874…
yep.....it was wasted really....the banks etc were determined to carry on and once in the to big to fail or too big to leave "our shores" category (because there is naff all left of manufacturing etc) ie a significant part of GDP, the writing was on the wall....I think we should start to see a few Pollies/bankers being hung in the next few years....
regards
The idea that a capitalist economy can support a socialist welfare state is collapsing before our eyes, says Janet Daley. http://www.telegraph.co.uk/comment/columnists/janetdaley/8685945/If-we-…
"widespread looting and riots in London over the weekend"
Bernard, your a jorno but please. Some action in Tottenham is hardly related to the economic situation. More the cops getting a little heady and the locals responding.
The shock is the world had to wait for S&P to tell them the US is on credit downgrade. They have been printing money for 18mths - the patient is already dead!!
Perhaps that's just the point, goldenfox? The riots may not have been about' the shooting', but a good opportunity for the UK to join in with the discontent that the citizens of the Western World are showing towards their 'leaders'? In that case; it is all about economics.
Goldenfox
Here's how the BBC reported the riots in Tottenham and now Enfield. Have a look at the images and video. Large numbers of burnt out building. Sustained looting. Something serious is happening there.
Police launch a major investigation in the wake of widespread rioting in north London which saw attacks on people, fires and looting
http://www.bbc.co.uk/news/uk-england-london-14438109
cheers
Bernard
I look at 2 examples, but there are plenty throughout history. One obscure event kicks off a whole series leading to something massive: the assasination of ArchDuke Ferdinand, and the self-immoliation of mohamed boazizi in tunisia.
the powder-keg is stacked and primed. now we await the lit match
"Something serious is happening"
Of course it is.
What is the youth un-employment? twice the adult is typical.....no money, no jobs no stake in society or the status quo.....if they can look into the future, what do they see? more of the same, or worse. We are looking at a 10 to 30 year event....a substantial number of such youth wont get a decent job, ever....
And whats getting better? we have had three years of "official" problem/recession, its at least another 3 to 5 years of staggering along like a wounded bull.....then Peak oil really starts to bite and we nose dive into a depression....or we blow up and go into a depression right now....nice choice....or even if you believe the hyper-inflationists we see welfare payments unable to cope there either....
This really is a minor riot, compared to whats coming I suspect, wait til we see hunger.
regards
FYI S&P 500 futures down 2.6% in early Asian trade.
cheers
Bernard
Stealing money in the millions daily - the corrupt, greedy and unethical powerfool’s are ruining the world. The game is over guys – the wall too high.
In comparison - I like that little guy – how he’s dealing with a problem – simple honest.
Here you go everyone
http://www.scoop.co.nz/stories/PO1108/S00100/media-use-of-statistics-good-bad-and-ugly.htm
Media use of statistics: good, bad, and ugly
Nominations are called for noteworthy statistics – good, bad and ugly – quoted in the New Zealand media, for a new weekly competition on the Stats Chat blog run by the Department of Statistics at The University of Auckland.
“We want New Zealanders to be more aware of statistics and the role they play in the media,” says Professor Thomas Lumley, a regular contributor to the blog. “We see numbers in the media every day and we want people to think carefully about them – what they actually mean and whether or not they make sense.”
Anyone may nominate a statistic used by the New Zealand media, explaining why they think it is noteworthy. School students, in particular, are encouraged to take part. The person who posts the winning entry will receive a $20 iTunes voucher.
“We’re looking for bad, exemplary or fascinating examples of statistics,” says Rachel Cunliffe who coordinates the blog. “All competition entrants need to do is quote the statistic, when and where it was published, and tell us why it should be our statistic of the week.”
Full competition details, including instructions on how to enter and judging criteria can be found on the site: www.statschat.org.nz
Stats Chat was launched earlier this year to scrutinise facts and figures used in the media. “We’re aiming to offer insight and boost statistical literacy by providing a space for thoughtful analysis and comment on the statistics making headlines,” says Head of Department Professor Chris Triggs.
As well as encouraging discussion about statistics, the blog provides an archive of resources for use by anyone with an interest in statistics, from members of the public to journalists, and teachers.
Recent posts by staff members have examined how the wording of poll questions may have influenced surveys on equal pay for men and women, scrutinised beliefs about student drinking, and looked at how the risk of accidental injury can be interpreted in different ways.
FYI rioting in London has now spread to Brixton, Guardian reports.
http://www.guardian.co.uk/uk/blog/2011/aug/07/tottenham-riots-police-duggan-live
12.13am: Looting is going on in Brixton, unhindered by the police, according to the Guardian's Matt Taylor.
At the scene, he witnessed a couple of hundred people taking goods out of Footlocker, which has now been set on fire. Some let on bicycles while others passed it to friends in waiting cars.
A police helicopter is circling overhead while police on the ground have congregated on side street close to scene but have not yet intervened.
Those taking part in the looting are aged in their teens or early twenties.
What the peeeepp... "riots in London over the weekend" This has nothing to do with the economic situation - it was from the Police shooting for Pete's sakes!!!!!
What news channel is BH watching - I bet it was Fox News! Or has BH taken up a part time role with Australian Womens weekly.. What a load of rubbish!
cm - hmmm. There is a rising generation who are well aware they've been robbed. Whether it be the Middle East, Britain, or here (where I attended a 500-plus gathering of local students last week - all questioning their real inheritance) they're pissed.
So take a step back and see the little people
They may be young
But they're the ones who make the big people big
So listen
As they whisper
What about me
What about me
It isn't fair
I've had enough now I wasn't my share
Can't you see
I wanna live
But you just take more then you give
Be warned........
Fancy quoting the lyric from an Australian band... But you forgot the last part of the song... Yes you are lucky and always want more... not just the liitle people!
And now i'm standing on the corner all the world's gone home
Nobody's changed, nobody's been saved
And i'm feeling cold and alone
I guess i'm lucky, i smile a lot
But sometimes i wish for more than i've got
Iconoclast - I've mentioned it here, but I was blown away by that lecture last week at Otago Uni.
Organised by a group called Generation Zero. One of the front-people would out-mana and out speak Key, in spades.
There were upward of 500 on them - all quiet, thoughtful student types. They're not likely to riot - but they're a tad more dangerous, for that. The discussion seriously touched on the need to end growth-based finance, and to reduce carbon (obvious from their name) to zero.
I was just stunned by the number.
It suggests that Labour and National are long-term history. Put that trolley on the powerdown/fiscal retraction downslope, and you can see a remnant extreme defending the doomed existing state of affairs (think of the top-hatters arresting Pankhurst, then running headlong into WW1) and a whole lot of disillusioned but basically good folk, wanting to do the right thing.
Those youngsters had us oldies on - rightly - about squandering their resources while leaving them the residual shyte to clean up. I've already apologised to my kids, we're going to have to do that en-masse.
PDK: The youngsters had us oldies on - rightly - about squandering their resources while leaving them the residual shyte.
"Their resources" hahahaha
Thats where our views depart. You are being seduced by the noise and clamour of the baying crowd. Much like the gay-movement wanting greater and greater privileges and entitlements.
I have challenged this notion in the past, accusing the "younger generation" blasting their very existence up their noses with crank. I have commented previously on the "younger generations" propensity to consume un-necessary toys and exhaust resources at a rate of knots never seen before. I dont accept the notion "that we invented the toys" therefore its not their fault.
Try the following and answer me this.
In all your days prior to your 21st birthday how much "un-necessary" damage did you do to your parents?
Quote from: Deborah Hill-Cone
Yesterday my credit card got declined after my 6-year-old daughter ran up a $1500 bill on an iPad game.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10742976
Nope - I'm seduced by nobody. I'm here because I worked out - all alone - that we would be in the shyte, about now. I did that at 20. 1975. Ever since, I studied the whats and the whys and the ifs.
You miss the point re youngsters - who barages them with advertising, playing at peer-fears?
Your generation, and mine. Sure, mea culpa - but I acknowledge it, and am doing as much as anyone I know, to redress that.
You raise a bigger, and valid question, though: (although you don't articulate it)
If the planet can support perhaps 2 billion at subsistence level, indefinitely, or one billion at our level, and we're carrying 7 billion as of October......... do we existing folk run the place into the ground, die off end story? Or do we reduce out population, ease our way to the subsistence level (or agree on a better quality/lesser people level), while there still some chance of doing so?
There is an argument that the speed of the disintegration in the first scenario, might give the survivors a better chance. I personally favour a controlled descent - but we're not going to be allowed the debate, while folk like Gonzo are funded by our Elder citizens.
http://www.telegraph.co.uk/finance/comment/liamhalligan/8686314/We-cant… BazzaMcKenzie
The elephant in the room is without QE there is now no one to buy most US government debt. The bulk of the last rounds of money printing found its way its way into Treasuries, of which Bernanke is now the proud owner of a mountain.
If QE does not restart, the debt Congress and Obama just committed to massively expanding can't, because there will be no lenders. So further US money printing is guaranteed.
Once you appreciate the simple fact that the Fed is now the primary lender to the US Government, and there are no alternatives, then money printing is an absolute certainty until Congress eventually refuses to raise the debt ceiling or the US economy collapses in hyper stagflation.
BazzaMcKenzie
Today 12:39 AM
No Liam, it is not Obama's job "to provide a rallying call". It was, and is, his job to enact policies that improve the economic position of the United States instead of the reverse.
While Obama has only limited responsibility for the economic conditions when he can to office, that is not true of his party, which has consistently pursued big government, corruption and insane policies like the CRA.
But since Obama came into office everything he has done has been economically destructive for the US, from his initial non-stimulating "stimulus" that was another payment to his supporters while pushing the US a further $1trillion into debt; Obamacare, whose job-destroying uncertainty hovers like a massive black cloud over the country; his EPA with its anti-CO2 regulations and threats that block development and force up energy prices; his blockage of oil and gas exploitation both on and off shore; his unending attempts to spend more and more on the government and his supporters; and the public's understanding that he will force up taxes whenever he gets the chance.
The two and one half years of Obama's presidency have made him incapable of issuing such a call in any meaningful way. His consistent actions have branded him for the destroyer he is.
The greatest uncertainty hanging over the US today is whether Obama will be re-elected in 2012. Every producer, as well as everyone dedicated to liberty, knows if that happens it will be a further 4 years of a concerted attack on everything that once made the US great.
As long as that uncertainty exists, producers in the US will limit their risks as much as possible, looking to place their capital outside the country and, instead of concentrating on building business, will be concentrating on bringing about Obama's presidential demise, without which no business building makes sense.
Obama, with the other Democrat leaders, is at the core of the US's problem and can never be part of the solution.
Updated. The NZ dollar dropped around 10am by as much as 70 bps to 83.7 USc as Asian markets slumped. Wholesale interest rates dropped back to their levels seen three weeks ago before talk of a OCR hike on September 15 caused ASB, Westpac and Kiwibank to lift fixed mortgage rates)
Therefore the banks should now reverse their fixed rates back to where they were before they were spruiking us left, right and centre two weeks ago about the economic "miracle" that is NZ as we bound out of depression in to recovery based on 0.8% growth or something preposterous (margin of error at all anyone??) and a government that is borrowing $325m a week on our behalf to keep the clapped out economic powerhouse of NZ going. Agree with you steven that there are likely to be a a few hangings in the next 1-2 yrs be they politicians, bankers, politician/bankers like Don Key and co.
2012 – a lot of fire and smoke and “The capitalistic, greedy and corrupt swine” to be slaughtered.
Looking into current developments on many fronts – the world will never recover again, simply because among the powerful in societies ethic and moral requirements and standards don’t prevail.
EP comments taken out of context and jumped on by self appointed anti racist brigade - anyone who has lived in GB and knows Brixton, Tottenham areas well have known for years what is happening - there are a lot of no go areas round there and it has nothing to do with the economy - When Britain was booming there was trouble there, ask Keith Blakelock's family.
For everyones dose of modern London history. The same estate-Broadwater Farm has always been one of the worst in london. PC Keith Blackelock was axed to death,in the last big riot. And while the police dealt with that, the crim element went round looting from their own! Same thing in Brixton, even robbed out the local community garage.
So, please do not confuse this as down to the Global meltdown, this was a drug dealer shot dead and that same minority causing trouble while they rob the community again!! Makes S. Auks a nice place to live in.
yeah EP warned 'em it would happen - too late now
I know poms that moved out of UK because of what was going on eg teachers wouldnt let school kids sing Xmas carols cos it might upset the other religeon
Weve gotta watch out for similar here like Harawira,Minto running their obnoxious separatist agendas
Actually Steven the global warming church you do belong to is definitely a minority and plenty of NZers don't want a bar of it.
It is only in the EU, (including the UK, ~1.7% of World CO2 emissions or ~11% of EU emissions), as well as Australia and New Zealand where their governments have committed action on CO2 into legislation.
These isolated nations are about 8% of the world population and only~14% of the world’s CO2 emissions at present.
Take a look.
Tis simple....just because the world doesnt want to know about AGW, doesnt mean it isnt happening and will not effect ppls lives.
I think Ive said it before though, I agree that ppl and Govn's wont act...so that means if the scientists are right on the extent of warming (at about 6~7Deg C) the end result is extinction of our (and many other) species in about 150~200 years or so. As we flip into a super-warm period....so after 100million years or so the carbon genie will be back in its bottle and the planet will start again.
LOL, Church, this is like Darwin v creationalism, on the scientific side we have Darwin and AGW and on the other religious denialists who believe that all AGW scientists are on the make and are telling falsehoods in order to effect freedom and the continued "right" to pillage the planet.
Personally I think it comes down to politics and greed again and again, it shows up the extremists its usual amoral light, all the while wrapped in their belief that some mythical being who talks to them says its OK to carry on. Thats OK of course, they get to go to heaven where all will be well, no nasty AGW or ppl of science there to spoil their...uh....ecstasy.
regards
Steven I cant see it as rational that the undeniers (undies) claim that the science is settled and are seeking to tax the living daylights out of us and force a massive transfer of wealth on the basis of information that has been proven to be suspect on more than one occasion.
The polar bears are not dying en masse
The himalayan glaciers are not melting as quickly as the head of the IPCC would have us believe. Neither is Greenland apparently
The emails were doctored and the perps got caught out
The hockey stick graph was discredited
James Hansens research was funded to a large extent by a foundation set up and funded by the wife of Senator John Kerry...he who is great mates with one Al Gore. Cosy.
etc etc etc
The science quite simply is not settled, but the problem is that when anybody challenges the "climate church" a rain of fire and brimstone descends upon them.
Kermie - how does it feel to spend every day with someone else's hand buried orifically up you, and someone else doing the scripting?
Seriously, the joke is that what we have been warning of, is happening all around you.
Attacking messengers won't change that one iota.
PDK thats pretty rich - the climate change lobby (including our very own Steven) attack anyone who dares disagree with them.
I had 9 years of Helens hand up me and didnt enjoy it one bit....and now she's at the UN which is driving the whole climate change agenda. Go figure.
"a lie, a half-truth, taking something out of context, exaggerating or simply making things up "
A charge that can be levelled at both sides of the debate Steven....not just the so called deniers
There is also a difference between calling someone on something and calling them silly emotive names
Difference is I can point to (and do) real scientists and real peer reviewed papers, data etc etc...ppl can do their own reading.
While the pro-AGW ppl are by no means perfect, the preponderence of mis-truth comes from the denier side.....and in fact there is virtually no, if any science on the denier side, its all politics and voodoo economics....anybody who looks at such should be able to figure that out by themselves.
regards
"I had 9 years of Helens hand up me and didnt enjoy it one bit....and now she's at the UN which is driving the whole climate change agenda. Go figure."
Which is simply untrue....unless you can show us a picture of HC's hand embedded, I think I'll call you on that one.
Funny thing is while you complain about Labour (or maybe simply Govn), the rabid right are pillaging you left right and centre.
regards
Not a Pom.
My battle with the UK is long over.....I could see the writing on the wall many years ago. Like I said before, 7billion ppl and the planet can only feed at most 2billion. We have 4million in a country the size of Britain and they have 70million odd and a 22mile piece of water so their chances are not too hot.
Im a NZer, just like anyone else with a NZ passport....I get the same terms and conditions and just 1 vote...
regards
Yes that's all true, but you have no history here, Steven. You don't have the dirt of this country running through your veins. No manu whenua. And that's the difference. I know that that is not a popular opinion and many try to deny that such a thing is important, exists, or in anyway matters. But it does. It's both real and it makes a big difference. New Zealand is an expression of, and is grounded in the collective consciousness and history of its people. Not it's foreign immigrants. But of course the immigrants can’t (or don’t want to ) see that.
Yeah - a lot of envy too,plus crap weather probably dosent help. Tourists go over there for a week and dont see the sun at all. Stuff like" the planet can only feed 2 billion people" from steven & co reminds me of the theory behind The Great Irish Potato Famine
they forgot where they planted them !
And where were you born, Kunst? Switzerland is that right? The same could be said of you. Another Johnny-come lately telling Kiwis and New Zealand what to do! Just as Steven's battles belong in the UK, yours belong (if that’s the right word for a Swiss) in Switzerland.
Why don’t you guys go back to your own countries and sort them out first before you come down here with your ‘European’ ideas and try to sort ours out?
Walter , you have no reason ( well , not more than a hundred or so ) to feel defensive or embarrassed by your Swiss heritage ........
....... hold your head up high , walk tall , and spit into the faces of the critics that it was your country who gifted to the world the infinte pleasures of cuckoo-clocks and of yodelling .....
Lay ee odl lay ee odl lay hoo hoo ........
And Kiwis' contribution to human betterment ? ..... lumps of butter ! ... Ha !!!
Gosh, I'm almost speechless. Is this comment for real DavidB? Don't you (and Iconoclast) think it's actually a good thing that so many immigrants are well enough integrated and interested in NZ to even bother taking part in debates on this site? I'd have thought there'd be more cause for concern if it wasn't the case.
Btw, seeing the % of "real" Kiwis deserting their home country for Oz, I wonder who'd pay taxes, and others' benefits, if not for us (dirty immigrants).
Trouble is David, we are ALL immigrants to NZ, as up until a few hundred years ago NZ was just a barron rock. It is a bit immature to slate someone, even Steven, who just because he wasn't born here isn't the same as you, in terms of his New Zealand-ness. Some people believe the Chinese were the first to 'land in NZ' - that would make us both immigrants - unless the B in your name stood for Blee etc.
I believe that to be honest as NZers we are the last people to talk about history as ours is so short.
One other thing David, should True, earth blooded NZers accept benefits from taxes paid by Immigrants to the IRD?
No we are not all immigrants here, frazcam. I was born here. I am not an immigrant. My parents were born here. My ancestry in this country goes back to the 1820s. I had a great grandparent who fought in the land wars. Maori have lived in this country for centuries. Immigrants are living people who were born somewhere else and then came here. And that's not me.
The only immaturity is the failure by some to acknowledge that history and place of birth actually matter and are the drivers of identity. A New Zealander is not a person who was born in South Africa and came here in 1990. Or an American, a Chinaman, or a Pom.
If you want to take you approach to its natural conclusion then we are all Africans. And that is patently absurd.
I can see and feel it David, during one of the many wars one of your grand - grand mothers was for a short time and by accident laying beneath a strong Maori with dirt in his veins also. That’s great - that’s where you probably got your fighting and cooking up skill from.
.... last that I heard of the venerable Walter , he was sitting in a corner , alternatively yodelling , and going " cuckoo cuckoo " ......
Kaikoura eventually does that , even to the most hardened souls ......
..... now , where's that other frigging malfunctioning android , the Chicken-Little HICKEY model , got to ?
So how old when you came to NZ??? I lived there for 38 years and believe me, those spectacles of yours must be extremely rose coloured if you couldn't see what the country was like. I also have friends in the Met who have said that policing in London is like trying to fence with both hands tied behind their back.
speaking of wanton vandalism - who is paying legal costs for these hoods that did the Waihopai job ? are they poms too?
A hearing is underway in Wellington against the three activists who caused more than a million dollars worth of damage to the Waihopai spy base.
The Crown is chasing Adrian Leason, Peter Murnane and Sam Land for $1.2 million in damages caused to the Government's satellite structure near Blenheim in 2008.
The three men were last year found not guilty by a jury on charges of burglary and wilful damage after slashing one of the satellite domes with a sickle.
The hearing is set down for one day in the High Court.
Coupla things.
Read MoM who is one of the best unsung analysts of the US scene - she's not impressed. And those freight loadings don't look great...
And the rioting/Fin de siècle meme - old news, chaps and chapesses. It's the Northern late summer, Youff unemployment rates at 40% plus, tax rates well north of That, little hope and less cash. Still, they Are paid for Existing.....
T'was Kipled years ago:
"As it will be in the future, it was at the birth of Man --
There are only four things certain since Social Progress began --
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire --
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins
As surely as Water will wet us, as surely as Fire will burn
The Gods of the Copybook Headings with terror and slaughter return!"
(Rudyard Kipling, final verse from 'Gods of the Copybook Headings' - 1919)
Fasten yer seltbelts..
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