By Bernard Hickey
Here's my 90 seconds at 9 am summary of the overnight news in association with Bank of New Zealand, including news the New Zealand dollar has strengthened to 80.7 US cents overnight in tandem with strength in the US stock markets, which was linked to hopes for a rebound in US economic growth.
Our currency often moves in sync with appetites for risk globally, given it is seen as a 'growth' currency exposed to moves in the global economy and commodity prices.
US stocks were up around 0.5% in late trade after data showed US factory output rose by 0.9% in December, which was the strongest growth in a year. See more here at Bloomberg.
Also producer prices fell 0.1% last month when inflation of 0.1% had been expected. In theory, this gives the US Federal Reserve more room to ease monetary policy to further boost the world's largest economy.
Meanwhile, markets also welcomed news the International Monetary Fund wants to double its lending firepower to US$1 trillion to help countries deal with any fallout from the European crisis. See more here at Reuters.
However, on the negative side, the World Bank slashed its growth forecasts overnight. It now sees global growth in 2012 of 2.5%, down from its June 2011 forecast of 3.6% growth for the 2012 year.
It also warned that emerging economies could see a slump in growth similar to that seen in 2008/09 in the wake of the Lehman Crisis. See more here at Bloomberg.
Also, Britain's unemployment rose more than expected to a 16 year high of 8.4%. See more here at Reuters.
The news came as British discount clothing retailer Peacocks was put into administration, putting 10,000 jobs at risk. See more here at BBC.
No chart with that title exists.
26 Comments
"The Greek PSI is once again (still) hitting the headlines. Here is what I think the most likely scenario is (80% likelihood).
Some form of an agreement will be announced. The IIF will announce that the “creditor committee has agreed in principle to a plan.” That plan will need to be “formalized” and final agreement from the individual institutions on the committee and those that weren’t part of the committee will need to be obtained. The headline will sound good, but will leave a month or so for details to come out. In the meantime every European and EU leader (or employee) with a press contact will say what a great deal it is. That it confirms that Europe is on the path of progress and that they are doing what they committed to at their summits.
The rating agencies will call it a DEFAULT, because it is. ISDA won’t call it a Credit Event because it isn’t. The EU leaders will call it a haircut or PSI, because they have an aversion to saying the word DEFAULT (and to the truth). There will be some concern that calling it a DEFAULT by the rating agencies will trigger some actions. It won’t. The ECB will allow banks to overrule the declaration of the rating agencies. They will say that Greece remains current on some bonds, that Greece will make payments on new bonds, so this DEFAULT situation is temporary and can be ignored for purposes of accounting, mark to market, collateral, etc.. It will avoid the chaos that would ensue, so they will go with the flow.
Then all talk will turn to Portugal. Why should Portugal continue to pay on their existing debt, when Greece just cut a great deal? And Ireland? The reality that Greece will NOT be an isolated case, but will be the norm will hit, and we will see the market give back the gains and sink lower on the realization that the banks recognizing losses is just beginning"
Keep your cash close at hand if you have any...better to be in land producing food...the piigs fiasco and greater EU farce is set to blow any week now.
The crunch will hit as the banks find the refi deals on debt are to cost a shite load more for longer leaving them with no option but to shove rates to the roof....watch now as the move comes to offload the already dead....the rush to dump with a bit of a pump....the property offers are set to explode onto the market...rural too.
Then they all fall over.
Some very good news- unless you are an enviro-fundie
Methanex has signed a ten year contract with Todd Energy that will enable it to restart its second methanol manufacturing train at Motunui, north of New Plymouth.
Five hundred new construction jobs will be created.
The Government is predicting the deal will lead to a $250 million a year increase in exports.
A report for Todd Energy shows it may generate up to $1.2 billion in government revenue from royalties and taxes.
hey gonz have you heard this podcast about the norwegian model"
http://www.npr.org/blogs/money/2011/08/26/139972557/the-friday-podcast-norways-got-advice-for-libya
yeah i understand that gonz, and i'm not having a go at you, but i'm sure you'd agree that having valuable stuff in the ground can be a double edged sword. I'm not against the extractive industries, but surely learning from successful nations like norway is not a bad thing.
The norse are pretty much the only people who havent been bitten on the bum by the oil curse
I found this interesting page:
http://www.olf.no/en/Facts/Petroleum-history/
And it turns out they have 10 commandments and a promise to NEVER make oil a political football at election time
1. National supervision and control must be ensured for all operations on the NCS.
2. Petroleum discoveries must be exploited in a way which makes Norway as independent as possible of others for its supplies of crude oil.
3. New industry will be developed on the basis of petroleum.
4. The development of an oil industry must take necessary account of existing industrial activities and the protection of nature and the environment.
5. Flaring of exploitable gas on the NCS must not be accepted except during brief periods of testing.
6. Petroleum from the NCS must as a general rule be landed in Norway, except in those cases where socio-political considerations dictate a different solution.
7. The state must become involved at all appropriate levels and contribute to a coordination of Norwegian interests in Norway’s petroleum industry as well as the creation of an integrated oil community which sets its sights both nationally and internationally.
8. A state oil company will be established which can look after the government’s commercial interests and pursue appropriate collaboration with domestic and foreign oil interests.
9. A pattern of activities must be selected north of the 62nd parallel which reflects the special socio-political conditions prevailing in that part of the country.
10. Large Norwegian petroleum discoveries could present new tasks for Norway’s foreign policy.
goNZ – I just added some important data bloggers may have to consider, reading your comment.
How much $$$$ can really be saved by growing your own?
http://www.fao.org/docrep/X0051T/X0051t02.htm
try this NZ site...
"Low incomes and high house prices had left Kiwis badly off and prevented many from owning property."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10779686
And the banks just love it all the way to the fat salaries and bonuses for the bosses...how can they lose...they have the full active support of the govt and the RBNZ...what a scam...what a rort....screwing Kiwi is a banking sport.
Hey Mr English....your GST grab amounts to $30,000 on every average new house...and you hand it out to the landlords as a subsidy via winz...and they buy more renters driving the bubble along...keeping the property prices high...what fun you are having Bill....!
The bankers have not been alone in dancing rings around the common or garden Kiwi ...... they've been cosily partnered with the pollies of the day ...... in the tango of debt & despair ...
...... Bernard would be a nimble footed fellow in the waltz of gloom & woe .....
..... the jack-booted hoons from the Food Police Corps are gearing up to find you Wolly , you and your illicit garden of salad greens and herbs . Trample the tomatoes , mangle the marrows , mash the potatoes ( ooops , scratch that one ! ) .......
Growing your own goodies will have bean deemed to bee an act of insurrection , against the State decrees , and against all known tenets of moral & civilised behaviour ...
.. .... prepare to suffer the consequences you .... you .... you ....... gardener !
Let them come Gummy...more compost is what they will make...
You'll love this one....burp...http://www.growinghopsyourself.com/
"New Zealand's national union movement is calling for volunteers to help build public opposition to the Auckland port company's plan to contract out waterfront work.
Council of Trade Unions president Helen Kelly says the unions are preparing a campaign of advertising and widespread public activities to tell Aucklanders their side of the bitter labour dispute which has sparked five strikes since November".
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10779669
Any volunteers?....rent a mob!...or are they busy pretending to be the 99% in a tent.
Did yer hear the translated phone call , of the Italian coast guard leader , tearing strips off the ship's captain . Fecking funny as all hell ..... the captain appeared to want to grab a taxi & head home ...... forget the ship , his crew & the passengers ..... someone else's problem !
....... he'd still be a shoe-in for a job as captain on the Picton-Wellington inter-island ferry ?
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