Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that US Federal Reserve Chairman Ben Bernanke has spoken in a CBS 60 minutes television interview about the outlook for the world's largest economy and what he might do to get it going again.
Bernanke said it was possible the Fed might increase its current US$600 billion second round of Quantitative Easing (QE II) if it didn't work.
He also said it may take 5 years for the US economy to return unemployment (currently 9.8%) to more normal levels.
Bernanke's comments pushed long term bond yields down slightly, but failed to reassure investors much.
The Dow was basically flat.
Meanwhile, the turmoil continues in European financial markets.
There is division between those countries that want European authorities to increase the size of its 750 billion euros bailout fund and Germany.
Belgium and Spain want a bigger fund, but Germany is opposed. There is also division over where to create a special type of European bond that would be issued with a single interest rate, unlike the current bonds issued by individual governments.
Germany is also opposed to this, fearing its strong economy will be used to subsidise the weak.
Only the ECB is united. It bought almost 2 billion euros worth of bonds last week.
Meanwhile, Hungary's credit rating was downgraded to one notch above junk.
No chart with that title exists.
31 Comments
times change, though - It'll be a BBQsided twitter this time around.
this is interesting - wonder what the unlimited urban cowboy makes of it:
http://www.odt.co.nz/news/dunedin/139569/peak-oil-drive-changes-dunedin
and there was some interesting comment on Morning Report....
The peak oil issue is getting some serious attention right now PDK.
Here's Richard Branson:
Branson Says World Faces ‘Unbelievably Painful’ Recession
By Kim Chipman
Dec. 5 (Bloomberg) -- British billionaire Richard Branson predicted an “unbelievably painful” recession if the world doesn’t move more quickly to a clean-energy economy.
“We are going to have the mother of all recessions if we don’t sort out our energy policy fast,” Branson said today at a conference in Cancun, Mexico, where United Nations-led negotiations for a new climate change treaty are taking place.
Oil prices as high as $200 a barrel and lack of government measures to encourage low-emissions energy sources, unemployment in the U.S. could reach 15 percent in five years “without any difficulty,” he said.
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aQafoDc6u8Zc
I think it's about 99% sure bet that US and other governments won't sort out energy policy in the next few years, which makes Branson's predicted $200 oil prices and "unbelievably painful" recession very likely.
Assuming this occurs I think the only decent investments over the next few years will be energy companies. Seems like NZOG could be a good option as it should benefit from rocketing oil prices + drop in NZD due our massive debt levels.
In a first for NZ, Dunedin City Council has commissioned a Peak Oil Vulnerability Analysis Report, which included surveys on travel habits, private fuel consumption and vehicle dependence and the effect of petrol prices and shortages. Appendices to the Report here
more at ...
http://oilshockhorrorprobe.blogspot.com/2010/12/dunedin-city-leads-on-p…
Go Dunedin !
Now ...time for a Government plan on Peak oil ....or are those pigs I just saw flying by
All eyes should be on English right now and through to the budget decisions....how can the govt spin its way to being relected on hope!.....not much milage in the export recovery fluff is there.....the revenue stream now looks like a creekbed west of the Alice...peasants have pulled their heads from the beach of debt and they see shitty times a coming ...so spending is out...surviving is in....emigrating is for real.
S&P are preparing to lower the boom on Noddyland....oh bugger mr Market will discover we are an Ireland of the South Pacific.
Rates can go only one way from here....what will that do for the fiscal hole....for the ponzi economy.....for the mortgage backed securities called "covered bonds".......
Meanwhile we have Goofy telling the media he has faith in his spokesperson on economic matters...a David Caygill...!!!and Labour will never again be just the same as Labour was...no more imprudent financial behaviour...just more promises to increase state spending by cutting back state spending..blah blah blah.......
Ireland of the South Pacific....Rates can go only one way from here...
Where? Up or down?
What is it with this nauseatingly bashworthy "Noddyland" thing Wallace? And your apparent need to apply derogatory appellations to anyone or anything you discuss.
Is it because you poppa left home when you were two, not leaving much to your momma and you, just an old guitar and an empty bottle 'o Bolly: and you don't blame him 'cause he run and hid, but the meanest thing he ever did, was before he left he went and named you Wally. I tells ya, life ain't easy for a boy named Wally.
Be careful Wallace or you may end up living by yourself out in the sticks and spending your days talking to all your imaginary friends on the computer.....oops, too late.
Changing the topic slightly, a nice EQC man visited one of our rentals this morning and in 15 seconds flat a $115,000 cheque was in the mail. He suggested that our insurer will probably write off the 300m2 2 storey house - personally I doubt that - as we are insured for full replacement (perhaps $500,000) and I would think that even a troop of overpaid monkeys could repair it for less than that.
This has got me thinking about how much stimulus the maybe $5billion in insurance money will create. It is certainly going to be interesting times as some suburbs get razed and cash pours into pockets.
Of course its all unknown territory but pouring $5b (that averages as $12,500 per person) into one city will surely lead to some excitement?
In all we have 28 eqc claims, maybe three perhaps five houses will get written off, the remainder will be be of the order $10k to $40k. Total payouts just for us will be potentially into millions. That's a lot more than the $200k damage I was thinking on the 6th of September.
Take a global recession, then throw in some localised stimulus - indeed a good recipe for interesting times.
Abhorrent, Why? I am in a jovial mood after waiting over 3 months for EQC to make a decision on a building with a makeshift leaky roof and a jigsaw puzzle for walls.
At least now we know the EQC is going to be realistic and not force us to wait 2 years for Fletchers to do the work.
All of that $5b will be spent either as debt reduction or adding to peoples savings/other spending (if buildings are not rebuilt) or on wages and materials (if they are rebuilt). It is a massive stimulus either way, the impact will be interesting at least.
Over 10,000 houses may well get full replacement payouts, however perhaps fewer than a thousand are probably totally uninhabitable, the owners/occupiers must have all found alternate accomodation as there is still no shortage of property available for rent in the city.
Once payouts are finalised only a relative few uninsured will be worse off financially. Many of those will find assistance through government schemes and in fact many may not actually be worse off as land values are relatively high and in many older areas of Christchurch land value is around the same as the total value of the property.
The retirement commissioner is taking the heat off John.....now all he needs to do is point to her comments...this will please all those who want to put the boot into the boomers backsides...cut back their pensions....should kick in from 2020 and push the age to 67 and trim the adjustments...something for the gen X and Y to look forward to...working longer!
Government needs to cut pensions sooner than later, especially to silly old sods who wax lyrical about things but conveniently (for them) ignore the biggest gravy train in town. But you are right, unless younger guys get their act together and build up a passive income stream for when they no longer will be actively working, then they are oblivious to what is in store. Or may be the sense of personal entitlement is so ingrained in the psyche of people, they can't believe it will happen. Also, human nature seems to have the children and elderly at the most self-centredness stages of life. I'm not a psychologist but the wife is. Realistically pushing the national super out to 67 by 2020 gives the thumbs up to most baby boomers so they will do 'nicely' but at the great expense of their children.
Did you bother to find out when the retirement commissioner reaches 65 Muzza!...hehe
2033 a joke and maybe you're right but gosh why make it just 2 years.....we copped a 5 year delay....I reckon 67 is not nearly enough....move it out to 70 and have it kick in at a faster rate to be all aboard by 2025.
That should make Muzza happy.
Wolly, assume you are referring to the Muldoon madness when he gave such a huge handout at 60yrs, this was never sustainable and when extended to 65 yrs that was still a good wicket. Actually I would be happy to see the whole national super dropped, wouldn't worry me too much, but that is not a political starter due to the sense of entitlement people have, so long as younger ones pay for it of course. I initially thought it made a little bit of sense if she was saying raise the age by 2 years at 2020, but the recommendation is so innocuous it probably will be accepted by the politicians. Good lord, even I would qualify by 2033, if I'm around, guess you mightn't be.
The thing is Muzza, all us old farts were once young fools and we believed the promises from the liars in wgtn...in time we learned what bastards govts are...we will vote out any lying pack of swine who try to steal from us the promised pension that was a tradeoff for paying stonking high friggin taxes for so long into a system that you were born into or that your parents decided to migrate to....The 'young' today have already benefitted from the high taxes we paid....think of the infrastructure all over the country, both tangible and otherwise. We paid for that...not you.
Key knows dam well he will be biffed out if he starts to mess with the pension....that is a certainty.
So the best you can expect is the sort of change suggested by the person paid heaps to say stuff....Or would you rather go back to when pension law was a political football.
You cannot change the fact we paid a fortune in taxes in our working lives. You can plan to improve your own situation because you have time on your side. We don't. The taxes rates you pay today are a fraction of those we paid. Check it out.
Here chook chook chook!
"The Reserve Bank of Australia played its own games of chicken, letting property bubbles get sky high in order to prevent a recession in 2008. Now, in spite of still rising commodity prices, Australia is on the brink of recession, with 3rd quarter GDP falling to .2%.
Those plowing into Australian dollars in belief it is a safe haven just may have another thing coming when the Reserve Bank is forced to cut rates to combat a recession it refused to allow the last go around.
Australia is finally poised to crash with massively rising housing inventory and multiple failed property auctions. The Australian economy will be in shambles when housing collapses. Imagine what happens when China slows and commodity prices sink as well. The Australian stock market could be in for one nasty spill"
"Statistics Canada , the federal government’s data agency, provided market-moving economic indicators to distributors ahead of their release to the public. Officials stopped the practice on Nov. 25 to ensure all users have access to information at the same time." bloomberg
Anyone know if stats NZ sell data early ??
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