Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that financial markets are awaiting the result of a vote of confidence in the Greek parliament due around 9 am NZ time (midnight Greek time).
The confidence vote is seen as a crucial roadblock for Greece to agree on another austerity package needed to unlock another bailout payout that would forestall any Greek sovereign debt default.
The European Central Bank has warned a Greek default could unleash financial chaos across the region as banks fear the impact of losses on many other banks. Some have described it as another potential Lehman moment similar to the crisis that struck credit markets in September 2008.
The risk for New Zealand is if credit markets do freeze again this will make it more difficult and expensive for our banks to roll over their short term foreign debts. Turmoil could also slow down any recovery in the global economy and stall global trade. Longer term fixed interest rates may rise and banks may tighten up their lending policies.
Meanwhile, there are reports that Greek savers are pulling their money out of Greek banks, which would be hit hardest in any Greek default. Some are buying gold, the FT reported.
Elsewhere, global brewing giant SAB Miller has launched a A$9.5 billion takeover bid for Australia's Foster's Brewing Group, signalling there is growing appetite for debt-funded takeovers using low interest rate US money. See more here at Business Spectator
Back in New Zealand, the government is expected to announce details on which parts of Christchurch can be rebuilt on either today or tomorrow. The speed of the rebuild is crucial for the economic recovery. There was another big aftershock in Christchurch overnight. See more here at NZHerald.
No chart with that title exists.
34 Comments
You are better to click on the link. I just pasted this over but the link is much better.
Democracy vs Mythology: The Battle in Syntagma Square
I have never been more desperate to explain and more hopeful for your understanding of any single fact than this: The protests in Greece concern all of you directly.
What is going on in Athens at the moment is resistance against an invasion; an invasion as brutal as that against Poland in 1939. The invading army wears suits instead of uniforms and holds laptops instead of guns, but make no mistake – the attack on our sovereignty is as violent and thorough. Private wealth interests are dictating policy to a sovereign nation, which is expressly and directly against its national interest. Ignore it at your peril. Say to yourselves, if you wish, that perhaps it will stop there. That perhaps the bailiffs will not go after the Portugal and Ireland next. And then Spain and the UK. But it is already beginning to happen. This is why you cannot afford to ignore these events.
It is vital to understand that I do not wish to excuse my compatriots of all blame. We did plenty wrong. I left Greece in 1991 and did not return until 2006. For the first few months I looked around and saw an entirely different country to the one I had left behind.
Regretfully, it must be admitted that we took this bait “hook, line and sinker”. The Greek psyche has always had an Achilles’ heel; an impending identity crisis. We straddle three Continents and our culture has always been a melting pot reflective of that fact. Instead of embracing that richness, we decided we were going to be definitively European; Capitalist; Modern; Western. And, damn it, we were going to be bloody good at it. We were going to be the most European, the most Capitalist, the most Modern, the most Western. We were teenagers with their parents’ platinum card.
That irresponsibility, however, was only a very small part of the problem. The much bigger part was the emergence of a new class of foreign business interests ruled by plutocracy, a church dominated by greed and a political dynasticism which made a candidate’s surname the only relevant consideration when voting. And while we were borrowing and spending (which is affectionately known as “growth”), they were squeezing every ounce of blood from the other end through a system of corruption so gross that it was worthy of any banana republic; so prevalent and brazen that everyone just shrugged their shoulders and accepted it or became part of it.
Greeks are protesting because they do not want the bail-out at all. They have already accepted cuts which would be unfathomable in the UK – think of what Cameron is doing and multiply it by ten. Benefits have not been paid in over six months. Basic salaries have been cut to 550 Euros (£440) a month.
My mother, who is nearly 70, who worked all her life for the Archaeology Department of the Ministry of Culture, who paid tax, national insurance and pension contributions for over 45 years, deducted at the source (as they are for the vast majority of decent hard-working people – it is the rich that can evade), has had her pension cut to less than £400 a month. She faces the same rampantly inflationary energy and food prices as the rest of Europe.
So, the case is not that Greeks are fighting cuts. There is nothing left to cut. The IMF filleting knife has gotten to pure, white, arthritis-afflicted bone. The Greeks understand that a second bail-out is simply “kicking the can down the road”. Greece’s primary budget deficit is, in fact, under 5bn Euros. The other 48bn Euros are servicing the debt, including that of the first bail-out, with one third being purely interest. The EU, ECB and IMF now wish to add another pile of debt on top of that, which will be used to satisfy interest payments for another year. And the Greeks have called their bluff. They have said “Enough is enough. Keep your money.”
My land has always attracted aggressive occupiers. Its vital strategic position combined with its extraordinary natural beauty and history, have always made it the trinket of choice for the forces of evil. But we are a tenacious lot. We emerged after 400 years of Ottoman occupation, 25 generations during which our national identity was outlawed with penalty of death, with our language, tradition, religion and music intact.
Finally, we have woken up and taken to the streets. My sister tells me that what is happening in Syntagma Square is beautiful; filled with hope; gloriously democratic. A totally bi-partisan crowd of hundreds of thousands of people have occupied the area in front of our Parliament. They share what little food and drink there is. A microphone stands in the middle, on which anyone can speak for two minutes at a time – even propose things which are voted by a show of thumbs. Citizenship.
And what they say is this: We will not suffer any more so that we can make the rich, even richer. We do not authorise any of the politicians, who failed so spectacularly, to borrow any more money in our name. We do not trust you or the people that are lending it. We want a completely new set of accountable people at the helm, untainted by the fiascos of the past. You have run out of ideas.
Wherever in the world you are, their statement applies.
Money is a commodity, invented to help people by facilitating transactions. It is not wealth in itself. Wealth is natural resources, water, food, land, education, skill, spirit, ingenuity, art. In those terms, the people of Greece are no poorer than they were two years ago. Neither are the people of Spain or Ireland or the UK. And yet, we are all being put through various levels of suffering, in order for numbers (representing money which never existed) to be transferred from one column of a spreadsheet to another.
This is why the matter concerns you directly. Because this is a battle between our right to self-determine, to demand a new political process, to be sovereign, and private corporate interests which appear determined to treat us like a herd, which only exists for their benefit. It is the battle against a system which ensures that those who fuck up, are never those that are punished – it is always the poorest, the most decent, the most hard-working that bear the brunt. The Greeks have said “Enough is enough”. What do you say?
http://sturdyblog.wordpress.com/2011/06/18/democracy-vs-mythology-the-b…
Nassim Nicholas Taleb is the Lebanese-American philosopher who formulated the theory of “Black Swan Events” – unpredictable, unforeseen events which have a huge impact and can only be explained afterwards. Last week, on Newsnight, he was asked by Jeremy Paxman whether the people taking to the streets in Athens was a Black Swan Event. He replied: “No. The real Black Swan Event is that people are not rioting against the banks in London and New York.”
Andrewj missed this paragraph - the last one of the Web link.
Hi,
Interestng.......I always though tof a Black swan as an actual event and not a non-event.
I wonder how bad it could get and how bad how quickly....right now the UK isnt being squeezed that bad...nothing like Greece...but riots in Birmingham or Brixton are not that unknown. Kind of wonder if its like a forest fire, one good spark and its all over the place very fast....and of course the UK is stepping aside from stage 2 of the Greek bailout (can we have another E110million please!), I wonder how much the risk of riots is in the thoughts of the UK PM....
If the spark is a riot over food prices, that goes nation wide, is that a black swan? for me, no, its not surprising.....or not un-considered....its not un-expected or un-foreseen....maybe I need to re-read his book.
regards
The American Dream --- George Carlin
It’s never going to get any better, don’t look for it, be happy with what you’ve got.
Because the owners of this country don't want that. I'm talking about the real owners now. The REAL owners, the BIG Wealthy business interests that control things and make all the important decisions.
Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.
They spend billions of dollars every year lobbying, to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I'll tell you what they don’t want.
They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests.
They don’t want people who are smart enough to sit around a kitchen table and figure out about how badly they’re getting @#$%ed by a system that threw them overboard 30 @#$%ing years ago. They don’t want that!
You know what they want? They want obedient workers. People who are just smart enough to run the machines and do the paperwork. And, just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your @#$%ing retirement money. They want it back so they can give it to their criminal friends on Wall Street. And, you know something? They’ll get it. They’ll get it all from you sooner or later cause they own this @#$%ing place! It’s a big club, and you ain’t in it! You, and I are not in the big club.
By the way, its the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care. Good honest hard-working people; white collar, blue collar it doesn’t matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means, continue to elect these rich @#$%-suckers who don’t give a @#$% about them.
They don’t give a @#$% about you. They don’t give a @#$% about you. They don’t care about you. At all, at all, at all. And, nobody seems to notice. Nobody seems to care. That’s what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick that’s being jammed up their @#$%holes everyday. Because the owners of this country know the truth.
http://www.youtube.com/watch?v=acLW1vFO-2Q
enjoy...it applies to NZ we are owned by the private for profit corporation known as the CROWN.
Charles Hugh-Smith in great form today and relative to the above article
Thanks Andrew,
That is a powerful piece of writing because it is simple and truthful.
"Money is a commodity, invented to help people by facilitating transactions. It is not wealth in itself. Wealth is natural resources, water, food, land, education, skill, spirit, ingenuity, art."
How we have lost out way!
I lived in Greece for two months in 2008. We stayed on an island and loved it. What impacted me was how much worse off they were after the Euro was introduced. They got Euro prices but kept the Greek incomes. For instance necessities like bread and cigarettes nearly tripled in price, I think Cigarettes went to 10 euro's a packet. They were all very poor when it came to consumption. The taxi drivers in Athens told the same story, that they were getting raped by the Euro. I felt very sorry for the locals who had very simple lives that were very appealing to me and my children, underneath it all was a saddness that they had missed what could have been.
My concern is that if we dont 'wise up fast' and stick together its going to get very ugly. Its going to be our turn soon, who are we going to blame?
I was in Rhodes prior to the Euro introduction. Loved the people - very proud and having uncomplicated, old world values/ethics. The sense of community was very strong.
The other thing was a deep rooted hatred for Germans. If this government accepts the terms of this bailout, I imagine they will be seen as traitors by the average Greek citizen. It really is a very dark hour for the people.
British banks exposure to Greece understated
http://www.channel4.com/news/catch-up/display/playlistref/210611/clipid…
"The speed of the rebuild is crucial for the economic recovery. " Yes, and yet I can't help wondering whether rebuilding as fast as possible is the smartest thing to do.
Abandoning the area isn't an option and leaving people in limbo for years isn't either but when you keep getting these shocks (and last night's one was violent), one wonders. Rebuilding to a very high earthquake-resistant standard and only on non-liquefaction prone areas should be OK I suppose...
If Key and Brownlee are stupid enough to turn the announcement of what areas are to be "abandoned" into a political point scoring exercise, it could very well cost them the election.
Tomorrow is NOT the day for grand political announcements.
There are tens of thousands of properties affected by varying degrees of liquifaction and subsidence. I doubt EQC and their engineers have even inspected every site. Yet each site is different, every section with its own set of circumstances. Every owner with their own intentions and thoughts.
Many areas may not be worth fixing even if they are fixable because the land values are low and most residents want to leave. Others that are expensive to fix may be worthwhile because the areas are desirable and owners want to stay.
The Government at this point has little knowledge of individual circumstances in these areas because they have avoided consultation with residents.
These are not decisions that can be made without discussion, without negotiation with land owners. A whole range of options is likely available in these areas including land swaps for those who want to stay in the areas with those that want to leave. This was a process of discussion that should have begun in earnest after Feb 22, instead we have had an absolute lack of consultation, causing stress, grief and anxiety.
Now with their hand forced politically some appalling decisions are likely to be made, simply because those in leadership have no idea how to proceed.
The best outcome would be to identify those wide areas where the Government is not able to fulfil its obligations to remedy land in any reasonable timeframe, and offer those land owners the option to either purchase the land (the owner having taken the insurance payout for the building) or purchase the whole property and leave the insurance handling over to the Government.
There is also the issue of not wasting the resources that are "the damaged buildings". Many of these buildings could be relocated (including concrete floored dwellings lifted off their slabs). Instead of crushing these properties their should be a process set up to reuse and recycle this buildings either in whole or in part. The current wanton destruction of these properties is symbolic of the current "it's all too hard" mentality.
Good points Chris.
While it's difficult to judge from this distance, I can't believe that they are just bulldozing these otherwise OK buildings just 'cause the foundations have slumped a bit. We've got thousands of people here in the Far North living in houses with leaking roofs, broken windows, rotten weatherboards and stuffed foundations. Just lift the houses up and sit them on vacant land until sections are available or the land is stabilised.What are they thinking? Oh I forgot, it wouldn't add as much to GDP.
I agree, if you are going to demolish, why is it necassary to smash every window, door, kitchen, bathroom and the last stick of timber to smitherines? I'm sure there are folk in Ch Ch that are uninsured, unemployed or otherwise down on their luck that could have put these houses and materials to good use.
Well after last nights shakes, and they were out by us, we had some minor damage from September, that was fixed, and now it all needs fixing again plus some...so IS there any point fixing while these are still going on, Look at the comments on Stuff.co.nz......people here are really seriously wondering if they should stay now...our kids are scared, our assets are getting smashed , it is high risk living thats for sure, and people are over the edge, they need the option (for those like Chris J) to walk away.
the governemnt is banking on people staying and rebuilding for growth, many many people now just want out.
Yep, my thoughts too as per above post. Last night shake was violent enough to wake me up (had gone to bed early for a change) and long enough that I had time to think "oh bugger, really don't wanna get out of bed because of these bl**dy quakes again. OK, maybe ought to get out of bed" and run downstairs to see if the kids were OK.
It seems like there has been new damage too and I'm really wondering if rebuilding quickly is very smart. Seems to me like we might as well throw the money for rebuilding out the window right now.
Retired ! ..... wash your mouth out . That evil word doesn't exist within the Gumdictionary .
.... planted my cacao seedlings , mangos , lanzones , jak-fruit ........ given them some rice husk mulch when the cloud-burst hit . Who-ever named it the " rainy season " wasn't kidding .
Time for coffee , and an improving book ( James Grant : The Trouble With Prosperity ) .
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